President Bola Tinubu has authorized the Nigerian National Petroleum Company (NNPC) Ltd to use its 2023 final dividends to finance petrol subsidy payments.
Additionally, he has approved the suspension of the 2024 interim dividends to help alleviate NNPC’s cash flow challenges due to the ongoing subsidy costs.
NNPC’s financial projections show a petrol subsidy expense of N6.884 trillion from August 2023 to December 2024.
This has resulted in the company withholding N3.987 trillion in taxes and royalties owed to the federation.
Despite the initial plan to eliminate the subsidy, it persists under the guise of a “subsidy shortfall/FX differential,” attributed to the naira’s devaluation and rising fuel import costs.
Consequently, NNPC is using a “derived FX rate” to keep petrol prices between N600 and N700 per litre, even though the official position is that the subsidy has been removed.
