President Bola Tinubu has given a go ahead order to the Nigerian National Petroleum Company Limited’s (NNPCL) request to use the 2023 dividends due to the federation to pay for petrol subsidy.
He also approved the immediate suspension of 2024 interim dividends to the federation, a strategic move aimed at scaling up the oil giant’s unstable cash flow.
Meanwhile, despite Tinubu’s declaration during his inaugural speech on May 29, 2023, where he announced the removal of the fuel subsidy, shadows of contradiction continue to trail his administration over the subsidy regime.
Though, Tinubu’s administration has on several occasions, denied paying subsidy.
In a report on Monday, the TheCable stated that Tinubu gave NNPCL the approval to pay for subsidy after it complained that it had exhausted all strategies to ensure a stable supply of gasoline in the country.
The company’s desperate plea to Mr Tinubu underscored their grim realization: without intervention, they would be unable to continue remitting funds into the Federation Account.
However, Tinubu directed that the taxes, royalties, and other funds earmarked for the Federation Account be diverted to cover the crushing costs of the fuel subsidy, a drastic measure that he approved on June 6, 2024.
A forecast from NNPCL, obtained by the newspaper, revealed the staggering reality: total petrol subsidy expenses from August 2023 to December 2024 are projected to soar to N6.884 trillion, leaving the oil company unable to remit a staggering N3.987 trillion in taxes and royalties to the Federation Account.
The precise amount of dividends that will be withheld or suspended remains shrouded in uncertainty.
