President Bola Tinubu has reportedly authorized the Nigerian National Petroleum Company (NNPC) Limited to use its 2023 final dividends owed to the federation to cover the costs of petrol subsidies.
According to a report by BusinessDay, the president also approved suspending the 2024 interim dividend payments to the federation to enhance NNPC’s cash flow.
The NNPC informed the president that the ongoing subsidy payments have left the company unable to pay taxes and royalties into the federation account, referring to this situation as a “subsidy shortfall/FX differential.” Based on an NNPC forecast obtained by the newspaper, the report indicated that the total petrol subsidy expenses from August 2023 to December 2024 are expected to reach N6.884 trillion. This shortfall will prevent the company from remitting N3.987 trillion in taxes and royalties to the federation account.
