President Bola Tinubu has approved the Nigerian National Petroleum Company (NNPC) Limited’s use of its 2023 final dividends, owed to the federation, to offset the mounting costs of these subsidies.
In addition, the President has sanctioned the suspension of the 2024 interim dividend payments to the federation. This measure is aimed at bolstering the NNPC’s cash flow, which has been severely impacted by the ongoing subsidy burden.
The NNPC has informed the President that due to the extensive subsidy payments, it is currently unable to remit taxes and royalties into the federation account. This situation, referred to as a “subsidy shortfall/FX differential,” reflects the financial challenges posed by maintaining fuel subsidies in the current economic climate.
Projections from the NNPC reveal that petrol subsidy expenses from August 2023 to December 2024 are expected to reach a staggering N6.884 trillion. This hefty financial obligation has rendered the NNPC unable to remit an estimated N3.987 trillion in taxes and royalties to the federation account.
While the exact amount of the dividends that will be withheld or deferred remains unconfirmed, this development underscores the significant financial pressures facing the NNPC and the broader implica
