Has President Bola Tinubu’s economic reform programme truly laid the foundation for prosperity, as the administration repeatedly argues? The next phase, the President says, should make that prosperity visible in Nigerians’ daily lives through lower living costs, more jobs, higher production, greater opportunities and rising household incomes.
That promise now faces a decisive test: Are Nigerians beginning to see the rewards of reform, and where exactly are the savings from subsidy removal going?
When petrol subsidy was removed in 2023, Nigerians were told the policy would eliminate waste, protect public finances and redirect scarce resources towards development. Citizens were asked to endure higher transport fares, rising food prices and increased household costs in the expectation that the sacrifice would eventually produce a stronger economy.
Three years later, that argument requires a rigorous public audit.
The latest financial disclosures from the Nigerian National Petroleum Company Limited (NNPC) raise difficult questions. NNPC’s 2025 audited accounts show N11.2 trillion in receivables from the Federation, representing costs and advances incurred on behalf of the government, including expenditure associated with securing the country’s oil and gas assets. That is about 57 per cent higher than the N7.13 trillion energy-security expense recognised in 2024.
There is an important distinction: the N11.2 trillion should not be interpreted as N11.2 trillion in new petrol subsidy spending in 2025. NNPC says no new energy-security expense was recognised during the year after reconciliation with government agencies. Nevertheless, its accounts show an energy-security-cost balance of about ₦8.67 trillion, alongside other amounts owed by the Federation.
That distinction is important, but it does not resolve the accountability issue. Instead, it underscores the need for greater transparency.
From petrol subsidy to energy-security expenditure
For years, the government defended petrol subsidy as a way to shield Nigerians from the full cost of petroleum products. Critics countered that the system was expensive, inefficient and vulnerable to abuse.
In 2023, the subsidy regime was effectively dismantled. The case for doing so was straightforward: Nigeria could no longer afford to keep petrol artificially cheap while infrastructure, healthcare, education, electricity and social services remained underfunded.
Yet NNPC’s 2024 accounts reported ₦7.13 trillion in energy-security expenditure, compared with ₦4.8 trillion in 2023. The expenditure was widely associated with petrol subsidy or under-recovery.
Since then, the terminology has become more complex.
Energy-security costs, advances, Federation receivables and spending to protect oil and gas infrastructure now overlap in public discussions.
For ordinary Nigerians, however, the labels matter less than the scale of the obligation.
Changing the classification of expenditure does not eliminate the obligation to explain it.
Energy security is necessary—but not a blank cheque
There is no serious argument against protecting Nigeria’s oil and gas infrastructure. Oil theft, pipeline vandalism and attacks on petroleum facilities have cost the country billions of dollars.
NNPC says improved pipeline security helped increase production, with crude oil and condensate output reaching 1.77 million barrels per day in 2025, the highest level in five years. If security spending prevents theft, protects pipelines and raises production and government revenue, it has a compelling economic justification.
But a legitimate objective does not automatically justify every naira spent in its name.
The questions are straightforward: How much is being spent? Who receives the money? Under what contracts? Through what procurement process? What work was performed? Who verified it? What losses were prevented? And how much additional revenue did the spending generate?
When expenditure reaches trillions of naira, these are not optional inquiries.
They are the minimum requirements of public accountability.
Nigerians deserve to see the beneficiaries
If the government spends billions or trillions protecting national assets, citizens should be able to trace the money from authorisation to the final beneficiary.
They should know the companies involved, the nature and duration of their contracts, the amounts paid, the expected outcomes and whether those outcomes were independently verified.
National-security concerns may legitimately restrict disclosure of sensitive operational details. But security cannot become a blanket justification for financial opacity.
The government can protect sensitive information while still publishing aggregate expenditure, procurement procedures, contract values, beneficiaries, audit findings and measurable outcomes.
Where are the subsidy savings?
The Federal Government has explained the savings generated by subsidy removal and how additional revenues have been shared among the three tiers of government. But those figures matter to Nigerians only if the money produces visible improvements in their lives.
The central question is therefore not simply how much the government saved, but what those savings have achieved.
Where is the evidence in better infrastructure, stronger social protection, improved public services and greater economic opportunity?
If subsidy removal generated substantial fiscal savings, how much went into infrastructure? How much went into social intervention, debt servicing and security? How much reached households directly? And how much ultimately went to contractors and corporate beneficiaries?
As the government asks citizens to endure painful economic adjustments, it must demonstrate, in figures ordinary people can understand, what those sacrifices have produced.
NNPC’s stronger finances make the question more important
The issue is even more significant in light of NNPC’s improved financial performance.
NNPC reported ₦7.2 trillion in profit after tax in 2025, up from ₦5.4 trillion in 2024. It also reported ₦34.5 trillion in revenue and said taxes, royalties and other remittances to the government increased by 39 per cent to ₦22.3 trillion.
These figures demonstrate the enormous financial potential of Nigeria’s petroleum sector. They also make institutional clarity indispensable.
If NNPC operates as a commercial entity under the Petroleum Industry Act while simultaneously incurring substantial costs on behalf of the Federation, Nigerians deserve a clear distinction between its commercial expenditure and spending undertaken as an agent of the government.
Without that distinction, taxpayers cannot easily determine which costs belong to NNPC, which belong to the Federation and which ultimately become public liabilities.
The real test of subsidy removal
The success of subsidy removal should not be measured simply by whether the government stopped paying one particular subsidy.
It should be measured by whether the resources previously consumed by the subsidy are producing better economic outcomes for Nigerians.
If citizens pay more for petrol, transport, food and other essentials while the government continues to assume substantial petroleum-related obligations, there must be a convincing explanation of where the corresponding public value is being created.
Nigeria should therefore establish a public-benefit test for major energy-security expenditure. Every major project should answer five questions:
What problem is being solved? How much public money is committed? Who receives it? What measurable outcome is expected? What independent evidence shows that the outcome was achieved?
The N11.2 trillion figure should prompt more than another political argument. It should trigger a detailed public accounting.
The Federal Government and NNPC should publish a full, independently verified account of the N11.2 trillion receivable and N8.67 trillion energy-security balance, including relevant contracts, beneficiaries, procurement processes, audit findings and measurable results.
The National Assembly and the Auditor-General should subject the figures to rigorous public scrutiny, recover any improperly spent funds and hold responsible officials and contractors accountable.
Subsidy removal cannot be defended as fiscal reform if one opaque petroleum obligation is simply replaced by another.
Energy security is essential, but it must not become a blank cheque, a substitute subsidy or a mechanism for transferring public wealth to undisclosed beneficiaries.
Until Nigerians can see where the money went, what it achieved and who benefited, the promised dividends of subsidy removal will remain more a matter of faith than evidence.
Abba Dukawa writes from Abuja and can be reached at abbahydukawa@gmail.com.
