The World Bank has raised concerns over a significant revenue shortfall in remittances by the Nigerian National Petroleum Company Limited (NNPCL) to the Federation Account, stating that only 50 percent of subsidy savings from oil revenue were transferred in 2024.
According to the latest Nigeria Development Update report titled “Building Momentum for Inclusive Growth,” the NNPCL generated approximately N1.1 trillion from crude oil sales and other income sources in 2024 but remitted only N600 billion to the Federation Account.
The remaining N500 billion was used by the national oil company to settle outstanding debt arrears.
“Despite the subsidy being fully removed in October 2024, NNPCL started transferring the revenue gains to the Federation only in January 2025. Since then, it has been remitting only 50 per cent of these gains, using the rest to offset past arrears,” the World Bank stated.
The revenue gap comes amid Nigeria’s fiscal consolidation efforts following President Bola Tinubu’s controversial decision to eliminate the long-standing fuel subsidy in 2023.
The policy tripled petrol prices across the country with government assurances that savings from the subsidy removal would be redirected towards infrastructure, social welfare and economic stimulus.
However, in response to social and political pushback, the full deregulation of the downstream sector was postponed until October 2024, pending the operationalization of the Dangote Refinery.
Despite the official termination of the subsidy regime, the World Bank noted that the NNPCL delayed transferring its revenue gains until the start of 2025 and has since remitted only half of the expected proceeds.
The institution warned that such practices could undermine Nigeria’s revenue mobilisation and fiscal transparency.
The World Bank further disclosed that NNPCL was the only major revenue-generating agency that underperformed in 2024 and contributed N0.6 trillion to the Federation Account Allocation Committee (FAAC), down from N1.1 trillion in 2023.
Meanwhile, overall revenue performance improved in 2024 as the FAAC data show that gross revenues collected by the major government revenue agencies, the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS), NNPCL and Nigerian Upstream Petroleum Regulatory Commission (NUPRC) surged from N16.5 trillion (7 percent of GDP) in 2023 to N29.5 trillion (10.6 percent of GDP) in 2024.
Despite this growth, concerns remain over the fiscal role of NNPCL.
The World Bank projected that oil will account for 70 percent of the federal government’s revenue in 2025, contingent upon full remittance of subsidy savings and improved accountability by the national oil company.
As of February 2025, NNPCL has reported N7.8 trillion in arrears owed by the government while the Federation has verified N6.1 trillion. This leaves a disputed balance of N1.7 trillion in net arrears.
The lack of full transparency and delayed remittances risk undermining the government’s fiscal reform agenda and could affect future budget implementation if left unaddressed.
The World Bank has urged Nigerian authorities to implement stronger governance measures to ensure complete and timely remittance of oil revenues into the Federation Account.
