The World Bank has raised concerns over the Nigerian National Petroleum Company Limited (NNPCL)’s handling of proceeds from the removal of petrol subsidies. Although President Bola Tinubu announced the end of the fuel subsidy in May 2023—with the final removal taking effect in October 2024—the World Bank disclosed that NNPCL only began remitting funds into the federation account in January 2025, and even then, only 50% of the proceeds were being transferred. The remainder, according to NNPCL, was used to offset legacy arrears, a move that the World Bank views as lacking transparency and contrary to the original intent of the subsidy reforms.
In its latest Nigeria Development Update (NDU), the World Bank acknowledged that the removal of fuel and foreign exchange subsidies had significantly improved Nigeria’s fiscal space, leading to faster GDP growth, rising foreign reserves, and a more unified exchange rate. However, it also emphasized that the full financial benefits of the subsidy removal had not been realized due to NNPCL’s partial remittance of oil revenues. The Bank called on the Nigerian government to enforce greater transparency and accelerate broader fiscal reforms to consolidate these economic gains.
Despite the reported macroeconomic improvements, the World Bank noted that the cost of living remains high, with inflation projected to average just over 22% in 2025. It also expressed concerns about the slow pace of implementing social safety nets, such as the cash transfer program intended to support 15 million Nigerians. With only a third of the beneficiaries having received payments, the Bank stressed the importance of ensuring economic growth translates into real opportunities and relief for the most vulnerable populations.
Experts believe the World Bank’s report validates recent shakeups in NNPCL’s leadership, implying a need for internal restructuring and greater transparency in the oil sector. Calls have grown for a forensic audit of NNPCL’s subsidy-related debts, amid allegations of inefficiencies, unaccounted crude sales, and pervasive oil theft. Transparency advocates argue that the lack of credible data on fuel imports and sales undermines public trust and threatens the integrity of fiscal reform efforts.
Historically, Nigeria has spent over ₦13 trillion on fuel subsidies between 2005 and 2020, with much of the spending reportedly benefiting elites rather than ordinary citizens. According to Mele Kyari, former head of NNPCL, the subsidy regime was plagued by fraud and failed to serve its intended purpose. The current administration maintains that subsidy removal was necessary to redirect funds toward national development. However, critics insist that for the policy to succeed, all subsidy savings must be fully accounted for, transparently managed, and reinvested in ways that genuinely uplift the masses.