President Bola Tinubu has reportedly approved the use of 2023 dividends due to the federation by the Nigerian National Petroleum Company Limited (NNPCL) to cover fuel subsidy payments, according to a report by TheCable.
Despite Tinubu’s May 29, 2023, announcement during his inaugural address that fuel subsidies were officially removed, recent developments suggest that the government continues to finance these subsidies, although it has consistently denied doing so.
In addition to approving the use of the 2023 dividends, Tinubu has also sanctioned the suspension of the 2024 interim dividend payments to the federation to help NNPCL manage its cash flow.
Weeks ago, protests erupted across Nigeria, with citizens demanding the reinstatement of fuel subsidies as one of their key demands.
However, in a national broadcast, Tinubu firmly rejected the return of subsidies, labeling the decision to remove them as “painful but necessary.”
He emphasised that the subsidy had been “a noose around the economic jugular of our Nation,” stifling economic development and progress.
According to the report, NNPCL sought the president’s approval to cover subsidy payments after exhausting various strategies aimed at ensuring a stable gasoline supply in the country.
These efforts included combating oil theft and vandalism, rescheduling debts, deferring payments to suppliers and contractors, postponing non-critical projects, and pursuing debt recovery.
“These strategies, the government oil company informed the president, have failed to ameliorate the problem, saying going forward, the company would no longer be able to remit funds into the Federation Account.”
As a result, Tinubu has directed NNPCL to use taxes, royalties, and other funds originally intended for the Federation Account to offset the fuel subsidy costs, according to the report.
