The Nigerian National Petroleum Company (NNPC) Limited is remitting only half of the financial gains from the removal of petrol subsidies due to debt arrears, according to a new report by the World Bank.
Last year, President Bola Tinubu announced the removal of controversial petrol subsidies, a move that tripled petrol prices overnight but was projected to save the government billions of dollars annually.
The decision, part of broader economic reforms, was expected to free up funds for critical infrastructure and social programs.
However, the World Bank’s latest Nigeria Development Update revealed that NNPC has only been transferring about 50 per cent of the savings from subsidy removal to the Federation Account, which is shared among the federal, state, and local governments.
“Despite the subsidy being fully removed in October 2024, NNPC started transferring the revenue gains to the Federation only in January 2025. Since then, it has been remitting only 50 percent of these gains, using the rest to offset past arrears,” the World Bank said in its latest report.
According to BusinessDay, the World Bank noted the federal government’s revenues for 2025 are anticipated to be 70 per cent from oil and 30 per cent from non-oil sources, assuming full remittance of the fiscal savings from PMS subsidy removal.
“However, as of March 2025, this full remittance had not yet occurred, as NNPC claims it has large PMS-related subsidies that should be settled first,” World Bank said.