The World Bank has raised concerns about Nigeria’s fiscal transparency, revealing that the Nigerian National Petroleum Company Limited remitted only half of the revenue gains derived from the removal of the petrol subsidy in 2024.

In its latest Nigeria Development Update titled “Building Momentum for Inclusive Growth,” the World Bank disclosed that of the N1.1 trillion realised by NNPCL from crude oil sales and related income in 2024, only N600 billion was transferred to the Federation Account. The remaining N500 billion, the report said, was used by the state-owned oil company to offset historical debts.

“Despite the subsidy being fully removed in October 2024, NNPCL began transferring the resulting gains to the Federation Account only in January 2025. Since then, it has been remitting just 50 per cent of these funds,” the report stated.

The fuel subsidy, long considered a drain on public finances, was officially eliminated in October 2024 after delays triggered by public backlash and the phased operational rollout of the Dangote Refinery. The removal, initially announced by President Bola Tinubu in mid-2023, was hailed as a bold economic reform expected to save Nigeria billions annually.

However, the World Bank noted that the delayed and partial remittances by NNPCL risk undermining the anticipated fiscal benefits. It warned that the Federal Government’s 2025 revenue projections—of which 70 per cent are expected from oil-related sources—depend heavily on full remittance of these savings.

“Ensuring the complete transfer of subsidy savings, estimated at 2.6 per cent of GDP in 2024, is essential to stabilise the country’s fiscal outlook,” the report said.

A breakdown of figures showed that while gross revenues collected by key revenue agencies—including the Federal Inland Revenue Service, Nigeria Customs Service, and Nigerian Upstream Petroleum Regulatory Commission—rose from N16.5 trillion in 2023 to N29.5 trillion in 2024, NNPCL’s remittances declined from N1.1 trillion to N600 billion over the same period. This, according to the report, was due to the persistence of an “implicit PMS subsidy” until September 2024.

The World Bank also detailed ongoing financial claims between the Federal Government and NNPCL. As of February 2025, NNPCL’s claimed arrears stood at N7.8 trillion, while the government’s counterclaims were valued at N6.1 trillion, leaving a net balance of N1.7 trillion in NNPCL’s favour.

To address the remittance shortfall and improve transparency, the World Bank recommended a forensic audit of NNPCL’s financial practices, adoption of uniform reporting formats to the Federation Account Allocation Committee, and enhancements to public finance management systems.

“Resolving outstanding arrears and ensuring that all revenue gains from subsidy reform are channelled to the Federation is critical to Nigeria’s fiscal consolidation,” the report warned. “Failure to do so could constrain the government’s ability to invest in infrastructure and social services.”

The Bank concluded by urging Nigeria to strengthen transparency in oil revenue accounting and prioritise efficient use of its fiscal resources to unlock inclusive growth.