The World Bank on Monday revealed that the Nigerian National Petroleum Company (NNPC) Limited is remitting only 50 per cent of the gains generated from the removal of petrol subsidies to the federation account.
In its latest Nigeria Development Update report released Monday, the global institution said NNPC started transferring the revenue gains to the federation account only in January.
“Since then, it has been remitting only 50 per cent of these gains, using the rest to offset past arrears,” the report said.
President Bola Tinubu announced the removal of costly petrol subsidies shortly after he was sworn into office in 2023.
The president said the decision was part of efforts to grow the economy for national development.
Since the pronouncement, many Nigerians have expressed concerns about the opacity in the management of the subsidy gains.
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Last month, the IMF called for transparency in the management of the Nigerian oil sector, most notably proceeds of the subsidy removal.
“We have been commending bold reforms by the government, but we need to see a little more transparency in the oil sector to ensure that fuel subsidy removal can result in more flow of resources into government coffers,” an IMF official noted.
In its report, the World Bank noted that for the nation to consolidate on gains of economic reforms, it is essential to ensure that the full revenue gains from the removal of the PMS subsidy—estimated at about 2.6 per cent of GDP in 2024—are transferred to the Federation.
“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 report said.
“Resolving any remaining net arrears and channeling the full benefits of subsidy reform to the Federation is critical for sound fiscal management.”
The NNPC has been under forensic audit in recent months, following alleged mismanagement of resources.
Last month, President Tinubu sacked the board of the NNPC Ltd, including Mr Kyari, and board chairperson Pius Akinyelure.
The president also approved Bayo Ojulari as the new GCEO of the NNPC and Ahmadu Kida as non-executive chairman.
The EFCC has initiated an investigation into alleged abuse of office and misappropriation of funds by former top officials of the NNPC Ltd, including two former chief executives, Mr Kyari and Abubakar Yar’Adua.
A letter, with reference number CR:3000/EFCC/ABJ/HQ/SDC.2/NNPC/VOL.1/698, dated 28 April, addressed to the NNPC Managing Director, showed that the EFCC is seeking certified records of salaries and allowances paid to 14 officials, including those who have retired.
The World Bank in its report also advised that close monitoring of the 2025 budget implementation is essential, as it has overly ambitious revenue assumptions and may lead to a larger-than-anticipate fiscal deficit.
“The budget aims to boost capital spending, and this must be done sustainably, within the broader objective of fiscal consolidation to complement monetary policy and achieve an overall policy mix that maintains fiscal discipline and brings down inflation,” the report said.
It noted that sustained efforts to enhance expenditure efficiency and transparency are crucial to maximising development outcomes. This responsibility lies not only with the Federal Government, but especially with states, which now receive more revenue (N13.8 trillion in 2024) than the Federal Government (N12.3 trillion).
