The World {Bank} has flagged the Nigerian Nationwide Petroleum Firm Restricted (NNPCL) for failing to completely remit funds gained from the removing of petrol subsidies, warning that the shortfall may undermine the nation’s {economic} restoration efforts.
In its newest Nigeria Improvement Replace launched this week, the worldwide lender stated NNPCL has solely transferred about half of the income it made after the gasoline subsidy was formally scrapped in October 2024.
In accordance with the report, titled Constructing Momentum for Inclusive Development, the nationwide oil firm generated ₦1.1 trillion from crude gross sales and different earnings in 2024. However solely ₦600 billion was despatched to the Federation Account, leaving ₦500 billion unaccounted for.
“Regardless of the subsidy being absolutely eliminated in October 2024, NNPCL began transferring the income positive factors to the Federation solely in January 2025,” the World {Bank} stated. “Since then, it has been remitting solely 50 per cent of those positive factors, utilizing the remainder to offset previous arrears.”
NNPCL claimed it was utilizing the withheld funds to settle legacy money owed. As of February 2025, the corporate stated it was nonetheless owed ₦1.7 trillion by the federal authorities after offsetting mutual claims.
Whereas different revenue-generating companies, just like the FIRS, Customs, and the upstream petroleum regulator, recorded main boosts in income following the tip of a number of subsidy regimes, NNPCL’s remittance was the one one which fell.
In 2023, the corporate had remitted ₦1.1 trillion, however this determine dropped to ₦600 billion in 2024, whilst whole gross income collected by authorities companies rose to ₦29.5 trillion, up from ₦16.5 trillion the earlier 12 months.
President Bola Tinubu’s choice to take away the gasoline subsidy in mid-2023 was initially praised by world {financial} establishments.
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It was anticipated to avoid wasting the nation billions and permit for funding in infrastructure and social programmes.
However the abrupt tripling of gasoline costs led to inflation and widespread hardship. Public backlash pressured the federal government to postpone full deregulation till October 2024, after the Dangote Refinery started operations.
Regardless of the coverage’s eventual implementation, the World {Bank} stated the anticipated windfall has not been absolutely realised.
“The fiscal outlook stays cautiously optimistic however hinges on the required consolidation of current advances,” the report famous.
“It’s important to make sure that the complete income positive factors from the removing of the PMS subsidy, estimated at 2.6 per cent of GDP in 2024, are transferred to the Federation.”
The {Bank} harassed that guaranteeing transparency in how oil income is managed is essential for Nigeria’s fiscal well being.
It urged the federal government to conduct a forensic audit of NNPCL’s funds and undertake standardised reporting codecs for all remittances to the Federation Account Allocation Committee (FAAC).
“Enhance public finance administration. Revenues are nonetheless low, constraining improvement spending. Be sure that income positive factors from the removing of the PMS subsidy circulate to the Federation,” it added.
The World {Bank} warned that except the complete advantages of subsidy reforms are channelled into the nationwide purse, Nigeria’s capability to fund infrastructure and cut back poverty will stay severely restricted.
