Tinubu Approves Use of 2023 NNPC Dividends for Petrol Subsidy Amid Ongoing Controversy

President Bola Tinubu has approved the Nigeria National Petroleum Company Limited (NNPCL)’s request to use its 2023 dividends to cover petrol subsidy payments.

The 2023 dividends, originally intended to be paid into the federation account for distribution among the three tiers of government, will now be redirected to address the subsidy shortfall.

This decision comes despite the federal government’s ongoing denial of any existing petrol subsidy, following President Tinubu’s declaration on May 29, 2023, that “subsidy is gone” during his inauguration speech.

In a recent development, Minister of Finance Wale Edun hinted that the gap between the landing cost of petrol and its retail price at filling stations is being covered by an unnamed “organization.”

According to a report by The Cable, President Tinubu has also approved the suspension of the payment of 2024 interim dividends to the federation in order to bolster NNPC’s cash flow.

The report revealed that the national oil company informed the president it would be unable to remit taxes and royalties to the federation account due to ongoing subsidy payments, which it referred to as “subsidy shortfall/FX differential.”

An NNPC forecast seen by The Cable projected that the cumulative petrol subsidy bill from August 2023 to December 2024 could reach ₦6.884 trillion. This would result in the company being unable to remit ₦3.987 trillion in taxes and royalties to the federation account.

The report also noted that NNPC is expected to pause the payment of interim dividends for eight months, from May to December this year, to manage its financial obligations.