In a startling turn of events, President Bola Tinubu has sanctioned the Nigerian National Petroleum Company Limited’s (NNPCL) request to tap into the federation’s 2023 dividends to finance the ever-controversial petrol subsidy, as reported by TheCable.
But there’s more; the president has also decreed the suspension of 2024 interim dividends to the federation, a strategic move aimed at bolstering the oil giant’s precarious cash flow.
Despite Tinubu’s bold declaration during his inaugural address on May 29, 2023, where he announced the removal of the fuel subsidy, shadows of contradiction loom large—rumors swirl that the government continues to squander billions on it.
The Federal Government, however, has staunchly denied these allegations, maintaining a firm facade. Just weeks ago, as Nigerians flooded the streets in a chorus of discontent over the crippling hardship they face, one of their fervent demands was the reinstatement of the subsidy.
Yet, in a nationally televised address, Tinubu stood resolute, dismissing any notion of returning to the subsidy, branding the removal decision as “painful but necessary.” He likened it to a noose tightening around the economic throat of the nation, stifling development and progress.
In a report from Monday, the beleaguered NNPCL informed that, after exhausting every conceivable strategy to stabilize gasoline supply—ranging from combating theft and vandalism to deferring payments to suppliers and even delaying non-critical projects—they now found themselves at a dead-end.
The company’s desperate plea to the president underscored their grim realization: without intervention, they would be unable to continue remitting funds into the Federation Account.
In response, President 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.
