Fuel Subsidy Removal Saved $7.5bn For Govt, But Power Costs Crushing Firms, Wans LCCI

Nigeria’s fuel subsidy removal has freed up $7.5 billion yearly for the government, but businesses are buckling under soaring power costs that eat up to half their budgets, the Lagos Chamber of Commerce and Industry (LCCI) has warned.

Speaking at the Agora Policy Stakeholders Dialogue in Abuja on Thursday, LCCI director general, Dr Chinyere Almona, said the reforms—including petrol subsidy cuts, naira exchange rate liberalisation, monetary tightening, and electricity tariff hikes—fixed deep economic flaws but piled pressure on the private sector.“I believe that when you put together the petrol subsidy removal, the exchange rate liberalisation, monetary tightening, and electricity tariff adjustments, these have put a lot of pressure on the private sector,” Almona stated.

She highlighted subsidy savings as a potential boon. “The removal of petrol subsidy alone could free up about $7.5 billion for the government every year, which should ideally be invested in infrastructure and human capital development,” Almona said.

“For the private sector, what we want to see is that the savings from the fuel subsidy removal are actually being used to fund infrastructure.”

Power has become the biggest headache, she explained. “
Almost between 40 and 50 per cent of a business’ cost will be power,” Almona noted, as firms reliant on generators face sharp rises in fuel-driven electricity expenses.

While macroeconomic signs like improved foreign reserves and balance of payments offer hope, Almona stressed the disconnect at street level. “The economy is improving at the macro level, but that improvement has not trickled down to the common man and many small businesses,” she said.

Almona called for urgent support: better credit access and targeted aid for small and medium enterprises (SMEs) to help them weather the storm.Her comments came amid broader dialogue where CBN deputy governor Muhammad Sani Abdullahi touted reform wins like declining inflation and reserve growth, and an Agora Policy study detailed hardships for households.