Subsidy removal averted national bankruptcy, boosted FAAC allocations — Lokpobiri fires back at Atiku, Obi

Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, has defended the Federal Government’s removal of the petrol subsidy, maintaining that the policy averted national bankruptcy and redirected trillions of naira toward sub-national development.

Responding to criticisms from opposition figures including Atiku Abubakar and Peter Obi, Lokpobiri argued that sustaining the subsidy regime was a fiscal impossibility.

He noted that the government was previously projected to spend roughly ₦18.4 billion daily amounting to about $15 billion or ₦21 trillion annually on subsidy payments, draining resources from the very oil sector meant to fund it.

According to the minister, the opaque subsidy arrangement crippled the Nigerian National Petroleum Company Limited (NNPCL) prior to its corporate transformation, leaving it unable to fulfill its financial commitments or pay cash calls in joint venture arrangements.

He highlighted that the corporation now operates without outstanding cash call debts, while debt service-to-revenue ratios have improved from an unsustainable 97 per cent down to approximately 60 per cent.

Lokpobiri stressed that funds previously locked into petroleum subsidies are now pooled into the Federation Account Allocation Committee (FAAC), with monthly disbursements regularly crossing the ₦2 trillion threshold.

This financial influx, he said, has rescued states from salary crises, enabling even the poorest administrations to finance infrastructure and meet recurrent expenditures.

Addressing critics who demand greater accountability, Lokpobiri argued that public scrutiny must shift away from Abuja toward state and local governments, which are direct beneficiaries of the increased allocations.

He maintained that Nigerians should actively demand transparency from their local leaders regarding the utilization of these windfalls.

Rejecting claims that federal savings from the policy have been mismanaged, the minister pointed to targeted federal interventions such as the Nigerian Education Loan Fund (NELFUND), compressed natural gas (CNG) initiatives, and clean cooking programmes as tangible proofs of the administration’s reinvestment strategy.