The Federal Government has said that revenue of states have doubled since the removal of the petrol subsidy.
Minister of Finance and Coordinating Minister of the Economy, Wale Edun, stated this while speaking during the National Health Financing Dialogue in Abuja.
He said: “Over the past two years, the bold reforms have come at some cost as you repair and you fix some of the things that were broken in the economy.
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“So, the removal of subsidy was a tough decision but it has restored fiscal balance, not just at the federal level.
“The states have much more money, they have double the kind of funds they had before, and so they are able to provide their own contribution in this all-important area and others.”
According to the minister, petrol subsidy was a distortion “which was only benefiting a few and even benefiting foreigners, and it was gulping about 2.5 percent of GDP”.
He said, “When you remove that, the opportunity cost was that there wasn’t enough funds for investment in healthcare, education and so forth.
“Therefore, it will take time and it is taking time to recover the kind of investments that have been lacking over the years.”
Since May 2023 when President Bola Ahmed Tinubu removed subsidy on petrol, Nigerians have been groaning from the pains inflicted on them by the decision.
PMS price moved to over N1000 per litre across the country, before dropping below N900 in recent times.
Although the inflation rates have fallen to 21.88 per cent in July from 22.22 per cent in June, it recorded a record high of about 27 per cent about one year ago.
Food inflation stood at 22.74 per cent year-on-year in July, compared to 39.53 per cent in the same month last year.