Petrol subsidy & public wages

Test the promise.
Subsidy and wage calculator

What would a lower petrol price mean for the federal wage bill? Enter a proposed price and annual Net Federation FAAC to calculate the trade-off.

₦9.73 trillionWage-coverage denominator
18.965 billion litres18,965,000,000 litres · 2025 estimate
₦/ litre
Enter today’s pump price. Applies only to your calculation; Reset restores the site default.

1Set the promise

All FAAC inputs cover one full year.

₦/ litre
Enter a price from ₦0 to ₦1,430.
₦trillion
2025 Net Federation FAAC: ₦21.89 trillion.
Annual net distributable FAAC before the proposed subsidy. Enter amounts in trillions; this value is editable.
Select the assumed federal allocation share.
This test holds consumption constant. A lower pump price could change demand; that response is outside this model.
Portrait of Peter Ogunkanmi, Peter Dollar
Meet the policy mechanic

I am Peter Ogunkanmi,
but you can call me
Peter Dollar.

I have a Bachelor's degree in Electrical and Computer Engineering from the Federal University of Technology Minna in 2005, and I'm a Master of Liberal Arts Candidate in Global Development Practice, at Harvard University, graduating 2027.

Development Practice is the process of decoding the underlying assumptions of development economics, formulating the preconditions for development theories to hold, interrogating those assumptions within local realities and creating alternatives for missing or invalid fundamental assumptions, so that economic frameworks can work out as intended.

Because, the person who formulated a theory often has never lived in your country and his or her assessment of reality may be incongruent to your environment, hence the necessity of theory domestication.

So, we are policy mechanics.

Policy effect

How much Wage Bill can Net FAAC pay after Subsidy?

—%

Enter your scenario to see wage coverage.

2026 wage bill: ₦9.73 trillion

2Follow the calculation

Results will appear after calculation.

—Current Price − Desired Price
—Annual consumption × subsidy per litre
—Net Federation FAAC − annual subsidy
—Selected share × remaining Net FAAC

3How Many Workers Go Get Salary?

One home represents 1 percentage point of wage coverage.

—

wage coverage visualised

Wage coverage fundedWage coverage unfunded

Green family homes represent the funded share; demolished-home symbols represent the unfunded share. A partially coloured home represents a fractional percentage point.

The homes are a symbolic illustration of wage coverage, not a prediction of actual home demolition, job losses or salary cuts. The grid is limited to 0–100%; the calculated percentage above is not capped.
2025 petrol consumption · table & sources

Monthly volumes are calculated from average daily domestic truck-out figures × calendar days. Annual model input: 18,965,000,000 litres.

2025 monthMillion litres / dayDaysMonthly litresSource
Annual total51.96 weighted avg.36518,965,000,000Calculated
    Data qualification. The annual figure is an estimate reconstructed from rounded monthly averages. September is 43.0 million litres/day in the accessible October NMDPRA chart, versus 43.8 in later press reporting. Using 43.0 gives 18.941 billion litres annually. October is 56.7 in the chart and 56.74 in the factsheet text. This build retains the requested 18.965 billion-litre assumption. The final unrounded regulator series has not been reconciled.
    Model scope, assumptions & formulas

    How this test works

    1. Subsidy per litre = ₦1,430 − Desired Price.
    2. Annual subsidy = 18,965,000,000 × subsidy per litre.
    3. Remaining Net FAAC = annual Net Federation FAAC − annual subsidy.
    4. FG share = remaining Net FAAC × selected percentage.
    5. Wage coverage = FG share ÷ ₦9,730,000,000,000 × 100.

    Reading the result

    The project rationale is to test political price promises against wage funding capacity. Government-owned enterprises and other revenues can contribute to federal revenue, while debt service and other obligations also require funding.

    The model notes that Net FAAC is not the federal government’s only cash receipt. However, the federal government also has debt-servicing obligations, so not all government receipts can be spent on wages and subsidies. This is why the model examines the impact of subsidies on the government’s ability to pay wages. GOE revenue is also excluded. This is not a full federal budget forecast.

    Wage bills, current price and share options are supplied scenario assumptions. The model does not claim these share options are statutory rates. Negative remaining FAAC indicates a funding deficit; coverage above 100% indicates more than one annual wage bill before other obligations.