NNPC Remits Only 50% Of Fuel Subsidy Revenue - World Bank

The World Bank has disclosed that the Nigeria National Petroleum Company Limited (NNPCL) has not been remitting full revenue from fuel subsidy to the federation account.

All Facts Newspaper reports that the World Bank also disclosed that it was in October 2024 that the federal government of President Bola Tinubu fully removed the subsidy, but NNPC started remitting the 50 percent revenue from January.

This was contained in the bank's Nigeria Development Update report, released on Monday, May 12. The report said Nigeria's fiscal outlook remains optimistic but hinges on the necessary consolidation of recent advances.

"It is essential to ensure that the full revenue gains from the removal of the PMS subsidy -estimated at about 2.6 percent 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 percent of these gains, using the rest to offset past arrears.

"Resolving any remaining net arrears and channeling the full benefits of subsidy reform to the Federation is critical for sound fiscal management,ÔÇØ it read.
2025 Budget Over-ambitious
The World Bank further faulted President Tinubu's 2025 budget. It described the budget's revenue expectations as overly ambitious.

According to the report, while the budget aims to boost capital spending, only fiscal discipline could help the government effectively implement the budget.

"Close monitoring of the 2025 budget implementation is essential, as it has overly ambitious revenue assumptions and may lead to a larger-than-anticipated 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,ÔÇØ it stated.

World Bank urged fiscal discipline and transparency among governors and federal government to maintain the country's optimistic development outlook.

"Sustained efforts to enhance expenditure efficiency and transparency are crucial to maximizing development outcomes. This responsibility lies not only with the Federal Government, but especially with states, which now receive more revenue (13.8 trillion in 2024) than the Federal Government (12.3 trillion), it added.