Tinubu bows to pressure, approves request for petrol subsidy, NNPC give details
President Bola Ahmed Tinubu
Reports say that President Bola Ahmed Tinubu has approved a request from the Nigerian National Petroleum Company Limited (NNPCL) to utilise the 2023 final dividends owed to the federation to cover the costs of petrol subsidy payments.
This comes amid rising fuel prices and scarcity, with Nigerians paying between N750 and N1,000 per litre for fuel.
The previous rate was at N620.
A dividend is a distribution of profits by a corporation to its shareholders.
NNPCL is now a commercial company, and its shares are held by the Ministry of Finance Incorporated and Ministry of Petroleum Incorporated in equal portions on behalf of the government.
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Thus, NNPCL’s shares are fully owned by the government pending a public offering.
No money to the federal government account
The Cable reports that the president has sanctioned a halt on the payment of 2024 interim dividends to the federation.
This measure is intended to enhance NNPC’s cash flow, allowing the company to manage the financial burden imposed by the ongoing subsidy payments.
NNPC Limited had approached the federal government explaining the financial strain caused by ongoing as the reason it is currently unable to remit taxes and royalties into the federation account, BusinessDay reports
The company described this situation as a “subsidy shortfall/FX differential,” highlighting its challenges in balancing its financial obligations with the subsidy program.
The total expenditure on petrol subsidies from August 2023 to December 2024 is projected to reach a staggering N6.884 trillion.
As a result, the company anticipates it will be unable to remit N3.987 trillion in taxes and royalties to the federation account during this period.
The new revelation raises questions about President Tinubu’s May 2029 address, in which he declared that the subsidy is gone.
