NNPCL remits only half of fuel subsidy savings – World Bank

According to its latest Nigeria Development Update, the World Bank reports that Nigerian National Petroleum Company Limited (NNPCL) has been transferring only 50% of fuel subsidy removal savings to the Federation Account.

It said out of the N1.1tn revenue from crude sales and other income in 2024, the NNPCL only remitted N600bn, leaving a deficit of N500bn unaccounted for.

The report titled “Building Momentum for Inclusive Growth” reveals that NNPCL is using the remaining funds to settle debt arrears.

In 2023, President Tinubu removed controversial fuel subsidies, tripling gas prices but promising to save billions for infrastructure and social programs. After public backlash, full deregulation was delayed until October 2024, following the Dangote refinery’s launch.

Despite the official subsidy removal, NNPCL delayed transferring the windfall to the Federation Account until January 2025 and has since remitted only half the proceeds.

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The World Bank projects that 70% of Nigeria’s 2025 government revenue will come from oil, assuming full remittance of subsidy savings.

“Despite the subsidy being fully removed in October 2024, NNPCL started transferring the revenue gains to the Federation only in January 2025. Since then, it has been remitting only 50 per cent of these gains, using the rest to offset past arrears,” the World Bank stated.

NNPCL was the only underperforming revenue agency, remitting just N0.6 trillion to FAAC in 2024, down from N1.1 trillion in 2023, due to the implicit subsidy that continued until late 2024.

Meanwhile, overall government revenue increased significantly:

“Gross revenues collected by Nigeria’s main revenue agencies surged in 2024, despite minimal remittances from NNPCL. FAAC data show that gross revenues collected by the main revenue agencies (FIRS, NCS, NNPCL, and NUPRC) rose significantly from N16.5tn (7 per cent of GDP) in 2023 to N29.5tn (10.6 per cent of GDP) in 2024.”

As of February 2025, NNPCL claims N7.8 trillion in arrears while the Federation claims N6.1 trillion, leaving net arrears of N1.7 trillion owed to the national oil company.

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