Abuja, Nigeria— The World Bank has raised concerns over the Nigerian National Petroleum Company Limited’s (NNPCL) partial remittance of revenue gains following the removal of the Premium Motor Spirit (PMS) subsidy.
This observation was detailed in the World Bank’s latest Nigeria Development Update (NDU), released in May 2025. The report indicates that despite the official cessation of the PMS subsidy in October 2024, NNPCL delayed the transfer of the resultant revenue gains to the Federation Account until January 2025. Since then, the company has been remitting only 50% of these gains, utilizing the remaining half to offset legacy arrears.
“The fiscal outlook remains cautiously optimistic but hinges on the necessary consolidation of recent advances,” the report states. “It is essential to ensure that the full revenue gains from the removal of the PMS subsidy—estimated at 2.6% of GDP in 2024—are transferred to the Federation.”
Further analysis reveals that NNPCL’s remittance to the Federation Account Allocation Committee (FAAC) dropped to N600 billion in 2024, down from N1.1 trillion in 2023. This decline is attributed to the implicit subsidy regime that persisted until the third quarter of 2024.
The World Bank emphasized the importance of transparency in oil revenue accounting and recommended a forensic audit of NNPCL’s finances. It also advocated for the adoption of standardized reporting templates to FAAC to enhance fiscal discipline.
“Resolving any remaining net arrears and channeling the full benefits of subsidy reform to the Federation is critical for sound fiscal management,” the report concludes.
By Adeola Olaniya | May 15, 2025
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