The World Bank has raised a red flag over the Nigerian National Petroleum Company Limited (NNPCL) for remitting only half of the funds saved from the fuel subsidy removal to the Federation Account. In its latest Nigeria Development Update titled “Building Momentum for Inclusive Growth”, the global financial institution noted that of the N1.1 trillion generated from crude sales and other income in 2024, just N600 billion was remitted, leaving a troubling N500 billion gap. These funds were supposed to be fully transferred to support government spending post-subsidy reforms.
According to the report, NNPCL has been diverting the other half of the subsidy savings to settle outstanding debts, instead of directing the full amount into the Federation Account as expected. This partial remittance raises transparency concerns, especially as Nigeria continues to rely heavily on oil revenue. The World Bank’s projections indicate that 70% of the government’s 2025 revenue will be oil-dependent—only achievable if NNPCL remits all it owes.
The fuel subsidy removal, announced by President Bola Tinubu in 2023, was aimed at redirecting funds to infrastructure and social services. However, due to public outcry and economic hardship, full deregulation was postponed until October 2024, aligning with the launch of the Dangote Refinery. Despite the official subsidy ending, NNPCL only began remitting its earnings to the Federation in January 2025 and has since done so inconsistently.
The report also highlights NNPCL as the only major revenue agency underperforming in 2024, remitting less than in previous years. Other key agencies such as the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), and Nigerian Upstream Petroleum Regulatory Commission (NUPRC) all showed significant improvements, pushing gross revenue collections from N16.5 trillion in 2023 to N29.5 trillion in 2024.
As of February 2025, there remains a dispute between NNPCL and the Federation over arrears. NNPCL claims it is owed N7.8 trillion, while the Federation puts the figure at N6.1 trillion—leaving a contested balance of N1.7 trillion. This ongoing discrepancy calls into question the financial accountability of Nigeria’s top oil agency and poses risks for future fiscal planning.
Source: Business day