The Nigerian National Petroleum Company Limited (NNPCL) has transferred just half of the revenue savings from petrol subsidy removal to the Federation Account, according to the World Bank’s latest Nigeria Development Update.
In the report titled “Building Momentum for Inclusive Growth”, the Bank revealed that out of ₦1.1 trillion generated from crude oil sales and related income in 2024, NNPCL remitted only ₦600 billion. The company retained the remaining ₦500 billion to offset outstanding debt arrears.
Delayed Remittance Undermines Fiscal Gains
President Bola Tinubu removed the long-standing petrol subsidy in 2023, triggering a sharp increase in pump prices. The administration promised to redirect the saved funds into infrastructure and social programs. However, following widespread public backlash, the government postponed full deregulation until October 2024, aligning it with the launch of the Dangote Refinery.
Although the subsidy officially ended in late 2024, NNPCL only began transferring savings to the Federation Account in January 2025. Since then, it has remitted just 50% of the expected revenue.
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 per cent of these gains, using the rest to offset past arrears,” the World Bank noted.
Oil Sector Transparency Remains in Question
The World Bank identified NNPCL as the only major revenue-generating agency that underperformed in 2024. Its remittance dropped from ₦1.1 trillion in 2023 to ₦600 billion, largely due to a continued “implicit subsidy” until late 2024.
Despite NNPCL’s shortfall, overall government revenue rose sharply. FAAC data shows that gross revenues collected by major agencies, including FIRS, NCS, NNPCL, and NUPRC, grew from ₦16.5 trillion in 2023 (7% of GDP) to ₦29.5 trillion in 2024 (10.6% of GDP).
As of February 2025, NNPCL claims ₦7.8 trillion in outstanding arrears, while the Federation disputes this, acknowledging ₦6.1 trillion, leaving a gap of ₦1.7 trillion under contention.
The World Bank warns that unless NNPCL fully remits petrol subsidy gains, Nigeria risks missing out on up to 70% of its projected oil revenue in 2025, undermining the broader goals of fiscal reform and transparency in the energy sector.