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Federal Government Approves N5bn Palliative for States, LGs to Cushion Impact of Fuel Subsidy Removal



The disbursement of N5 billion to states, local government councils, and the FCT has received approval from the Federal Government. This financial allocation aims to mitigate the impact of the petrol subsidy removal.

During the conclusion of the National Economic Council (NEC) meeting in Abuja on Thursday, Governor Babagana Zulum of Borno State provided this information. He conveyed that the allocated funds would be utilized for procuring 100,000 bags of rice, 40,000 bags of maize, and fertilizers.

Governor Zulum clarified that the disbursement structure involves a combination of 52 percent in grants and 48 percent in loans. The loans are expected to be repaid to the Central Bank of Nigeria (CBN) over a span of 20 months by the respective states and local councils.

He said that the council commenced President Bola Tinubu and the CBN for the various efforts aimed at reducing the impact of the removal of the subsidy on the citizens.

Zulum also said that the federal government had sent food items to states bordering Niger Republic to mitigate the influx of refugees coming into the states.


The states, he said, were also given five trucks of rice each by the federal government last week for distribution to vulnerable Nigerians in their domain.

“Furthermore, Council has noted the package that was announced by the president in order to cushion the effect of subsidy removal, amounting to about N500billion.

“This fund has to be distributed to the following sectors MSMEs, industrial sector, about N125billion will go to cash transfers, agricultural sector as well as gas expansion for buses.

“Because of the increasing cost of fossil fuel, the federal government intends to establish more gas stations in Nigeria, procure more gas powered buses, CNG buses, as well as electric buses in order to cushion the effect of the subsidy removal.”

The states,  he said, has also been directed to negotiate with the labour unions leadership on the palliatives, adding that a committee of governors had been set up for this purpose.

H said that council recognised that these interventions were short term solutions, adding that long lasting solutions were being worked out.

Gov. Yahaya Bello of Kogi said that the NEC discussed the issue of impact of the 2022 flood on states and what needed to be done to victims.

He said that the NEC urged the federal government to immediately dispatch relief materials to the flood victims in the states.

He said that the delay in the disbursement of relief was due to some states that had yet to respond to request of providing data on the flood situation in their areas.

Gov. Seyi Makinde also said that the NEC observed a minute silence for the officers and men of the armed forces killed in helicopter crash in Niger State.

He said that the council also advised the government to take immediate actions and policies to stabilise the economy, lower unemployment rate and improve investment flow to the country.