President Bola Tinubu has given the green light for the Nigerian National Petroleum Company Limited (NNPCL) to utilize its 2023 dividends, initially intended for the federation, to address the increasing costs of the nation’s petrol subsidy. The Cable report.
This decision comes as the NNPCL faces soaring subsidy costs, projected to reach N6.884 trillion by the end of 2024. To ease the financial strain on the state-owned oil giant, Tinubu also sanctioned the suspension of 2024 interim dividend payments, allowing NNPCL to bolster its cash flow amid warnings that the subsidy burden could prevent the company from remitting nearly N4 trillion in taxes and royalties.
The move, which follows NNPCL’s announcement of a 28% increase in net profit to N3.297 trillion for 2023, underscores the severe financial pressures caused by the subsidy, exacerbated by foreign exchange challenges. Despite these measures, the NNPCL has raised concerns about its ability to maintain fuel imports, highlighting the ongoing challenges facing Nigeria’s energy sector. The decision has sparked significant political debate, reflecting the broader public concern over the long-term sustainability of fuel subsidies in the nation.
