The World Bank has revealed that the Nigerian National Petroleum Company Limited (NNPCL) remitted only 50% of the revenue gains from the removal of the fuel subsidy to the Federation Account in 2024.
In its latest Nigeria Development Update (NDU) released Monday, the World Bank highlighted issues of fiscal transparency and revenue management following the downstream petroleum sector deregulation initiated by President Bola Tinubu in October 2024.
According to the report, of the N1.1 trillion generated from crude oil sales and related income, only N600 billion was remitted by NNPCL, leaving a shortfall of N500 billion.
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The report also noted that NNPCL’s remittance to the Federation Account Allocation Committee (FAAC) dropped from N1.1 trillion in 2023 to N600 billion in 2024, attributing the decline to an “implicit subsidy” that remained in effect until Q3 2024.
…However, NNPCL was the only laggard, remitting just N0.6tn to FAAC in 2024, down from N1.1tn in 2023, largely due to the implicit PMS subsidy, which remained in place until the end of September 2024. Although the subsidy was fully removed on October 1, 2024, NNPCL did not start transferring the resulting revenue gains to the Federation until January 2025. From that point, it began remitting 50 percent, with the other half being used to settle past arrears.
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In spite of a sharp rise in gross revenues by the country’s main revenue-generating agencies from N16.5tn in 2023 to N29.5tn in 2024, NNPCL’s remittance fell to N600bn in 2024, down from N1.1tn in the previous year, the NDU partly stated.
The World Bank also recommended that, to achieve full transparency in the fuel subsidy removal process, the NNPCL should remit all revenue gains from the subsidy elimination in full.
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