The Presidency has defended the removal of petrol subsidy, arguing that the policy has significantly boosted revenue allocations to states and local government areas, enabling them to invest more in infrastructure, workers’ welfare and social services.

In a statement issued on Sunday, Special Adviser to the President on Information and Strategy, Bayo Onanuga, was responding to recent remarks by former Vice President Atiku Abubakar, who questioned how savings from the subsidy removal had been utilised.

Atiku had insisted that Nigerians deserved a full account of the subsidy savings, dismissing claims that the funds were being channelled into workers’ welfare. His comments followed an assurance by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, that the Federal Government would soon publish a detailed breakdown of how the savings had been spent.

According to Oyedele, a substantial portion of the funds had been used to meet financial obligations previously financed by the Central Bank of Nigeria, service increased debt costs arising from tighter monetary policies and support the implementation of the new national minimum wage.

Reacting, Onanuga maintained that the Tinubu administration deserved credit for ending a subsidy regime that successive governments had failed to dismantle despite repeated recommendations from international financial institutions.

He argued that previous administrations, including the one in which Atiku served as vice president between 1999 and 2007, retained the subsidy system despite its growing fiscal burden.

“The current administration deserves commendation for removing a policy that had become a heavy burden on the nation’s resources,” Onanuga said.

He added that the most immediate and visible outcome of the reform had been the sharp rise in statutory allocations from the Federation Account to state and local governments.

According to him, the increased allocations have expanded the financial capacity of subnational governments, allowing many to spend more on roads, schools, hospitals, salaries, pensions and social intervention programmes.

Onanuga also cited independent assessments, including those by the World Bank, which he said had acknowledged improvements in government revenues and capital expenditure at the state level following the fiscal reforms.

He further argued that the policy had strengthened Nigeria’s federal structure by providing states and local governments with greater financial resources and responsibility for development.

“This is true federalism and a bold step towards the economic restructuring many have long advocated,” he said.