The World Bank has explained how the Nigerian National Petroleum Company Limited remitted only 50 percent of revenue gains from the removal of the Premium Motor Spirit subsidy to the country’s Federation Account.
The Bretton Woods institution disclosed this in its latest Nigeria Development Update released on Monday.
NDU, which revealed concerns over fiscal transparency and revenue management following the deregulation of the downstream petroleum sector by President Bola Ahmed Tinubu’s administration in October 2024.
Accordingly, the World Bank said that out of the N1.1 trillion revenue from crude sales and other income in 2024, the NNPCL only remitted N600 billion, leaving a deficit of N500 billion unaccounted for.
Similarly, the World Bank document showed that NNPCL remitted just N0.6 trillion to FAAC in 2024, down from N1.1 trillion in 2023.
The World Bank attributed the sharp drop in remittances to the implicit subsidy regime that persisted until the third quarter of 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.
“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 further advised that that to ensure complete transparency of fuel subsidy removal, NNPCL should implement full remittance of fuel subsidy revenue gains.
How NNPCL failed to remit N500bn to FAAC in 2024 — World Bank
