FG Clarifies: Subsidy Removal Isn’t an Instant Cash Windfall

The Budget Office Director-General has dismissed the idea that removing petrol subsidy automatically creates extra funds. He explained that subsidy reforms only correct pricing distortions in public finances, not generate new cash. He warned that the belief in immediate gains is misleading. Subsidies on petrol, forex rates and electricity tariffs impose hidden costs on the state. Fixing them without broader reforms risks leaving systemic imbalances. Widespread practices such as revenue netting, institutional retention and off-budget spending cause fiscal leakages. To plug these gaps, Executive Order 9 (2026) now requires all public revenues to flow through the Consolidated Revenue Fund first. The director-general stressed that true fiscal space comes from recovering and managing resources already earned. He said long-term stability lies in combining subsidy reforms with stronger revenue capture and accountability measures.

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