THE World Bank has disclosed that the Nigerian National Petroleum Company Limited (NNPCL) failed to remit half of the revenue generated from the removal of fuel subsidies in 2024, leaving a gap of N500 billion in the Federation Account.
According to the World Bank’s latest Nigeria Development Update report, titled “Building Momentum for Inclusive Growth,” NNPCL earned approximately N1.1 trillion in 2024 from crude oil sales and related sources.
However, only N600 billion was transferred to the Federation Account, with the remaining N500 billion reportedly used to clear legacy debts.
This revelation raises concerns about transparency and fiscal discipline following Nigeria’s deregulation of the downstream petroleum sector.
President Bola Tinubu had removed the petrol subsidy in 2023, a move praised by global financial institutions despite causing a sharp rise in petrol prices and living costs. The subsidy was fully withdrawn in October 2024 after the Dangote refinery commenced operations.
However, the World Bank report reveals that NNPCL only began transferring the associated revenue to the government in January 2025—three months after full deregulation. Even then, the company has been remitting just 50 percent of the revenue gains.
“The fiscal outlook is cautiously optimistic,” the report noted. “But it depends on full consolidation of reforms, especially ensuring that the entire subsidy savings—about 2.6% of GDP—are directed to the Federation.”
Data from the Federation Account Allocation Committee (FAAC) shows NNPCL’s contribution dropped from N1.1 trillion in 2023 to just N600 billion in 2024. This contrasts with a surge in overall federal revenue collections, which rose from N16.5 trillion in 2023 to N29.5 trillion in 2024, thanks to foreign exchange gains and improved tax collections.
Despite this boost, NNPCL remained the only major revenue agency lagging in remittances. As of February 2025, the company claimed N7.8 trillion in arrears, while the Federation’s claim stood at N6.1 trillion—leaving a net balance of N1.7 trillion owed to NNPCL.
To enhance fiscal discipline, the World Bank recommended a forensic audit of NNPCL’s finances and the adoption of standardised reporting templates to FAAC.
It also called for improved transparency in oil revenue accounting and stronger public financial management systems.
Bretton Woods institution warns that failure to channel full subsidy savings into the Federation Account could weaken fiscal reforms and limit the government’s ability to invest in critical infrastructure and social development.