The release of funds for the production of oxygen was "necessitated by the increased number of patients who need oxygen due to the surge in Covid-19 infections in the country", the statement said.
It said a further 255 million naira (R10 mln) had been approved for repairs of oxygen plants in five hospitals.
Earlier this week, the state government in Lagos, the epicentre of Nigeria's outbreak, said demand for oxygen at one of its main hospitals had increased fivefold in recent weeks to 350 6-litre cylinders a day. It said that was expected to more than double to 750 by the end of January.
Nigeria has recorded 114,691 Covid-19 cases and 1,478 deaths, as of Thursday.
While wealthier countries have begun mass vaccination campaigns, African countries are scrambling to secure supplies.
Nigeria's state governors issued a statement on Thursday in which they said the country's first vaccine doses were expected to arrive by the end of February.
Authorities previously said the first doses, under the COVAX programme backed by the World Health Organization to secure fair access to Covid-19 vaccines for poor countries, were expected by the end of January. ($1 = 380.7000 naira)