Lagos State Governor, Babajide Sanwo-Olu, has said the removal of petrol subsidy by President Bola Ahmed Tinubu’s administration has significantly increased the financial resources available to state and local governments across Nigeria.

Sanwo-Olu said the policy, though initially difficult for Nigerians, had resulted in a substantial increase in federal allocations to the subnational governments, giving states and local councils greater capacity to execute development projects and meet their obligations.

The governor made the remarks while defending the Tinubu administration’s economic reforms and dismissing calls by some politicians for the return of fuel subsidy. According to him, politicians promising to restore the subsidy are engaging in populist politics and making promises that may not be sustainable.

Sanwo-Olu noted that monthly allocations to states and local governments have more than doubled in naira terms since the removal of the subsidy. He argued that the increased allocations have provided subnational governments with additional resources to fund infrastructure, social services and other development programmes.

He maintained that before the subsidy removal, a significant portion of government resources was committed to maintaining the subsidy regime, limiting the funds available for development at the state and local government levels. The reform, he said, has changed the fiscal position of the subnational governments.

The Lagos governor therefore urged Nigerians to consider the long-term benefits of the reform rather than calls for a return to the old subsidy regime. He said reversing the policy without addressing its fiscal implications could undermine the gains recorded in government revenue and funding for the states and local governments.

Sanwo-Olu’s position comes amid renewed debate over the impact of fuel subsidy removal on Nigerians, particularly following calls by opposition figures and other stakeholders for measures to reduce the hardship associated with higher petrol prices.

He maintained that the focus should now be on ensuring that the additional revenues accruing to governments are translated into tangible improvements in the lives of citizens through effective governance, infrastructure and social interventions.