Economy & Business

Nigeria spent N1.16 trillion on fuel subsidy in 2021, RMAFC says

By NowinAfrica Editorial Board • August 9, 2026 • Economy & Business

An institutional photograph of a large modern office building typical of a Nigerian national oil company headquarters, with a paved entrance — Naziftm / CC BY-SA 4.0, via Wikimedia Commons

Nigeria’s federal government spent N1.16 trillion on fuel subsidy payments in 2021, according to figures disclosed by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC), as reported by Peoples Gazette Nigeria.

The commission, which is constitutionally mandated to monitor federal revenue and advise on fiscal policy, said the figure reflected the cost of maintaining the long-running subsidy on imported petroleum products, particularly premium motor spirit (PMS), during the 2021 fiscal year. The subsidy is administered through the Nigerian National Petroleum Company (NNPC), which has historically served as the country’s main importer of refined petrol and the conduit for subsidy reimbursements.

Nigeria’s fuel subsidy has been a fixture of the country’s economic policy for decades, originating in the 1970s as a social welfare measure to keep petrol prices low for ordinary consumers. Successive administrations have struggled with the fiscal burden, with the subsidy often consuming a significant share of federal revenue and bypassing the formal budget process. Reform proposals have been raised and postponed repeatedly, amid concerns about the knock-on effects on inflation, transportation costs and the wider cost of living.

In 2023, the administration of President Bola Tinubu announced the removal of the subsidy as part of broader economic reforms, prompting a sharp increase in petrol pump prices and a steep rise in transport and food costs across the country. The reform has remained politically contentious, with trade unions and civil society groups calling for palliatives and alternative support measures for ordinary Nigerians.

The RMAFC disclosure adds to the ongoing debate about the scale of public resources previously committed to the subsidy and the implications for federal budgeting going forward.