According to a report based on a forecast from the Nigerian National Petroleum Company (NNPC) and obtained by the newspaper, the total cost of petrol subsidies from August 2023 to December 2024 is projected to reach N6.884 trillion. This will result in the NNPC being unable to transfer N3.987 trillion in taxes and royalties to the federation account.
Despite repeated government denials regarding the non-payment of fuel subsidies, President Bola Tinubu has authorized NNPC Limited to use the 2023 final dividends owed to the federation to offset the subsidy expenses, as reported by BusinessDay.
The president has also approved the suspension of 2024 interim dividend payments to the federation to improve NNPC’s financial liquidity.
The NNPC has informed the president that it is currently unable to remit taxes and royalties due to the subsidy payments, referring to this issue as a “subsidy shortfall/FX differential.”
The exact amount of dividends that will be withheld or delayed could not be confirmed at the time of this report.