By Milcah Tanimu
President Bola Tinubu has authorized the Nigeria National Petroleum Company Limited (NNPCL) to utilize its 2023 dividends for the payment of petrol subsidies.
These dividends were initially intended for deposit into the federation account, from which they would be distributed among the federal, state, and local governments.
This decision marks a departure from President Tinubu’s previous stance, expressed during his inauguration on May 29, 2023, when he declared the end of petrol subsidies.
In a recent interview, Finance Minister Wale Edun indicated that the difference between the cost of imported petrol and its retail price is being covered by an unnamed organization.
Additionally, President Tinubu has agreed to suspend the payment of 2024 interim dividends to the federation to support NNPC’s financial needs. The company has reported that it will be unable to contribute taxes and royalties to the federation account due to the costs associated with the subsidy.
Forecasts suggest that the total petrol subsidy bill from August 2023 to December 2024 could reach ₦6.884 trillion, leaving NNPC unable to remit ₦3.987 trillion in taxes and royalties. Consequently, NNPC plans to halt interim dividend payments from May to December this year.
