The World Bank has flagged the Nigerian National Petroleum Company Limited (NNPCL) for failing to fully remit funds gained from the removal of petrol subsidies, warning that the shortfall could undermine the country’s economic recovery efforts.
In its latest Nigeria Development Update released this week, the global lender said NNPCL has only transferred about half of the revenue it made after the fuel subsidy was officially scrapped in October 2024.
According to the report, titled Building Momentum for Inclusive Growth, the national oil company generated ₦1.1 trillion from crude sales and other earnings in 2024. But only ₦600 billion was sent to the Federation Account, leaving ₦500 billion unaccounted for.
“Despite the subsidy being fully removed in October 2024, NNPCL started transferring the revenue gains to the Federation only in January 2025,” the World Bank said. “Since then, it has been remitting only 50 per cent of these gains, using the rest to offset past arrears.”
NNPCL claimed it was using the withheld funds to settle legacy debts. As of February 2025, the company said it was still owed ₦1.7 trillion by the federal government after offsetting mutual claims.
While other revenue-generating agencies, like the FIRS, Customs, and the upstream petroleum regulator, recorded major boosts in revenue following the end of multiple subsidy regimes, NNPCL’s remittance was the only one that fell.
In 2023, the company had remitted ₦1.1 trillion, but this figure dropped to ₦600 billion in 2024, even as total gross revenue collected by government agencies rose to ₦29.5 trillion, up from ₦16.5 trillion the previous year.
President Bola Tinubu’s decision to remove the fuel subsidy in mid-2023 was initially praised by global financial institutions.
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It was expected to save the country billions and allow for investment in infrastructure and social programmes.
But the abrupt tripling of fuel prices led to inflation and widespread hardship. Public backlash forced the government to postpone full deregulation until October 2024, after the Dangote Refinery began operations.
Despite the policy’s eventual implementation, the World Bank said the expected windfall has not been fully realised.
“The fiscal outlook remains cautiously optimistic but hinges on the necessary consolidation of recent advances,” the report noted.
“It is essential to ensure that the full revenue gains from the removal of the PMS subsidy, estimated at 2.6 per cent of GDP in 2024, are transferred to the Federation.”
The Bank stressed that ensuring transparency in how oil revenue is managed is crucial for Nigeria’s fiscal health.
It urged the government to conduct a forensic audit of NNPCL’s finances and adopt standardised reporting formats for all remittances to the Federation Account Allocation Committee (FAAC).
“Improve public finance management. Revenues are still low, constraining development spending. Ensure that revenue gains from the removal of the PMS subsidy flow to the Federation,” it added.
The World Bank warned that unless the full benefits of subsidy reforms are channelled into the national purse, Nigeria’s ability to fund infrastructure and reduce poverty will remain severely limited.