Sh*cking Revelation: NNPC Only Remitted Half of Subsidy Earnings — World Bank

The World Bank has revealed that the Nigerian National Petroleum Company Limited (NNPCL) has not been remitting the full proceeds from fuel subsidy savings into the Federation Account. According to its latest Nigeria Development Update report released on Monday, May 12, the World Bank disclosed that although the administration of President Bola Tinubu officially removed fuel subsidy in October 2024, NNPCL only began remitting 50% of the associated revenue to the Federation from January 2025.

To ensure fiscal sustainability, it is critical that the full revenue gains from the elimination of PMS subsidies—estimated at approximately 2.6% of GDP in 2024—are fully transferred to the Federation. Despite the formal removal of the subsidy in October, NNPCL only commenced partial remittances in January and has since been transferring just 50%, applying the remainder to settle outstanding arrears.”

The World Bank emphasized that settling the remaining subsidy arrears and directing 100% of the savings to the Federation is essential for maintaining fiscal discipline and transparency.

2025 Budget Seen As Overly Ambitious

In its analysis of Nigeria’s 2025 fiscal plan, the World Bank expressed concern over what it called “overly optimistic revenue projections.” While commending the plan’s intent to boost capital expenditure, the Bank warned that the expected revenues may not materialize, potentially widening the fiscal deficit.

“Effective execution of the 2025 budget will require strict fiscal discipline. The budget’s assumptions are highly ambitious and, if not closely managed, could derail the government’s economic goals,” the report stated.

The Bank stressed that beyond federal efforts, state governments must also prioritize transparency and spending efficiency, especially as they are projected to receive ₦13.8 trillion in revenue in 2024—more than the Federal Government’s projected ₦12.3 trillion.

“Improving transparency and ensuring efficient expenditure at both federal and state levels is vital to achieving Nigeria’s development objectives,” it concluded.