NNPC hasn’t fully transferred fuel subsidy removal proceeds into federation account – World Bank
The World Bank has said the Nigerian National Petroleum Company (NNPC) Limited has not fully transferred into federation account the expected revenue gains from petrol subsidy removal, as only half are being remitted.
World Bank’s lead economist for Nigeria, Alex Sienaert, spoke on Monday during the launch of the May 2025 Nigeria Development Update (NDU) in Abuja.
On May 29, President Bola Tinubu said the petrol subsidy regime was over.
Although the federal government had consistently denied the return of petrol subsidy, the NNPC, on August 19, said the federal government owes it N7.8 trillion for under-recovery.
Speaking at the event, Sienaert said NNPC started using the official FX rate for transactions in October 2024, marking the end of implicit subsidies.
“Other things to keep an eye on at present include the good news, of course, that the PMS subsidy was effectively ended last October, but revenue gains from this are yet to fully flow to the federation,” he said.
“NNPC began applying the official exchange rates for all its kind of transactions and fiscal revenue calculations back in October, so no more implicit subsidy.
“But as of January, NNPC was still only transferring about half of the resulting revenue gains from the subsidy elimination to the federation, and that’s because of arrears and counter-arrears and what have you.
“It’s just going to be important in the coming months to keep tracking this, and ultimately that all revenue gains from the difficult job of eliminating the subsidy do flow to the federation, so that that can support a continued healthy fiscal picture, and in turn stand in on the government priorities for Nigeria.”
