The nation’s apex oil concern, the Nigerian National Petroleum Company Limited (NNPCL) allegedly remitted only half of the fuel subsidy savings thus far and the World Bank is the one telling us and not the Minister of Finance or the Central Bank Governor? You see the country, Nigeria!
The World Bank had queried the remittance of the proceeds of the petrol subsidy removal by the Nigerian National Petroleum Company Limited (NNPCL) noting that while the subsidy was fully removed in October 2024; the NNPCL did not begin transfer of the gains to the Federation Account until January 2025 despite a surge in gross revenues collected by Nigeria’s main revenue agencies in the year.
It also stated that since January this year, the national oil company has been remitting only 50 per cent of the subsidy proceeds and claimed to be using the rest to offset what the company called “past subsidy arrears.”
Alex Sienaert, World Bank’s lead economist for Nigeria, who stated these in Abuja while presenting the May 2025 Nigeria Development Update (NDU) report, urged the federal government to increase transparency in matters of oil revenues.
The Nigeria Development Update is the World Bank’s regular flagship report on Nigeria. It covers at least every six months, providing a dive into the Nigerian economy, covering recent developments in economic policy and providing perspective on the outlook for the economy going forward.
According to the World Bank, NNPC’s remittance performance in 2024 was allegedly due to “implicit petrol subsidy,” (whatever that means) which was in place till September 2024.
Recall that President Bola Tinubu in his inauguration speech of May 29, 2023, said petrol subsidy was gone. That was after reports had shown that former President Muhammadu Buhari spent N10.7 trillion on petrol subsidies in a few months to the end of his tenure in 2023.
Following the President’s announcement, the price of Premium Motor Spirit (PMS) popularly called petrol jumped the same day from the prevalent N450 per litre to an average of N 950 and within few days it was N1,350 per litre in Abuja, Port Harcourt and most other parts of Nigeria.
Now the World Bank is coming to tell us that fuel subsidy was not actually removed until October 2024, that’s a whopping 17 months’ unaccountable interval. How would President Bola Tinubu and the operators of the NNPCL explain this policy chicanery to Nigerians as his announcement at the inauguration ground shut up not only the price of petrol but also prices of almost all the essential commodities including food items in the market till today?
Obviously, the government deliberately introduced hardship and hard life to its citizenry just to satisfy the International Monetary Fund (IMF) and the World Bank. The grossly negative multiplier effects of such open pronouncement was never considered by the President as he basked in the euphoria of achieving his life dream of being sworn as the President of the Federal Republic.
It would be recalled that the NNPC on August 2024 had said the Federal Government was owing the company over N7.8 trillion for under recovery. They did not want to call it subsidy payment because they can’t explain to Nigerians why they were still paying such huge amount of money as subsidy when the President had told the whole world that “subsidy was gone.” So the Tinubu’s government continued the payment of subsidy well into the third quarter of 2024 (more than one year after “Fuel subsidy is gone declaration.”
FAAC data show that gross revenues collected by the main revenue agencies (FIRS, NCS, NNPCL and NUPRC) rose significantly from N16.5 trillion (7 percent of GDP) in 2023 to N29.5 trillion (10.6 percent of GDP) in 2024.
“However, NNPCL was the only laggard, remitting just N0.6 trillion to FAAC in 2024, down from N1.1 trillion in 2023, largely due to the implicit PMS subsidy, which remained in place until the end of September 2024,” as disclosed.
Although the subsidy was fully removed 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 allegedly being used to settle past arrears.
Now, is it not interesting that The World Bank in its NDU report deliberately pretended not to be aware of the secrete loans the NNPCL has been taking and had to repay in whatever manner when in actual fact the Bank itself facilitated some of those questionable loans under the pretence of helping the Nigerian economic get back on its feet.
From all indications, the N500 billion shortfall in remittance to the Federation Account is an obvious understatement of the shortfall in the subsidy gains. Frankly speaking, this money may not have been outrightly stolen but most likely must have been deployed to offset some loan obligations by the NNPCL. Ofcourse corruption cannot be completely ruled out also as the loan deals were all sealed in secrecy.
The truth is that Nigeria has been entrapped in some secret loans unilaterally taken by the NNPC using our yet-to-be-produced crude oil as collateral in some cases. Some of the loans came about from production sharing contracts and they were not captured as revenue which under normal circumstances must be remitted to the Federation Account to pass through the rigours of budgeting and releases.
And some of the loans repayment does not exist as deduction from revenue earnings from oil as the creditors simply come in to lift crude oil equivalent to whatever was agreed as the repayment benchmark at agreed intervals.
It still boils down to the lack of transparency and gross opacity in the accounting for the nation’s oil proceeds. There is no country in the world that cannot accurately give you a figure of how much its crude oil sales has amounted to within a given time frame except our country Nigeria.
How do you explain the allegations that some oil blocs/producing fields are not adequately documented and so crude productions from such wells/fields are not properly captured in our production and revenue earnings accounting? It’s very unfortunate that things had to go this way in the nation’s most crucial sector.
Truth be told, very terrible things happened in and with the NNPC under the Buhari administration. Officials of that administration including extended family members of the then President were engaged in open stealing of our oil money with Presidency-backed impunity.
Most of the crude oil they told us were stolen were actually volumes Mele Kyari and his co-operators sold without records. Some people may think this is not possible. It is very possible and indeed it happened under Kyari’s NNPCL and may still be happening till today under Tinubu even as the new helmsman at the company is still settling in.
The shenanigans in accurately accounting for our oil proceed is going to continue for a very long time because it has become traditional that those who superintends in the NNPCL system always find ways to work with co-travellers in the Presidency. How they manage to co-opt officials of every new government is best blurred and at worst obscured. It is still going on today but who will bail us as a nation when all those we could have been crying to are all involved in the arrangement.
Nigeria shall be well again, Amen!
(IFEANYI IZEZE writes from Abuja: iizeze@yahoo.com; 234-8033043009)
