Bola Tinubu has approved a request by the Nigerian National Petroleum Company (NNPC) Ltd to utilise the 2023 final dividends due to the federation to pay for petrol subsidy, TheCable reported.
Tinubu also approved the suspension of the payment of 2024 interim dividends to the federation in order to augment NNPC’s cash flow.
In addition, the national oil company told Tinubu that it will be unable to remit taxes and royalties to the federation account for now because of the subsidy payments, which it termed “subsidy shortfall/FX differential”.
An NNPC forecast seen by the newspaper showed that the cumulative petrol subsidy bill from August 2023 will hit N6.884 trillion by December 2024, leaving the national oil company unable to remit N3.987 trillion in taxes and royalties to the federation account.
However, TheCable could not confirm the total amount of dividends to be withheld or suspended.
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NNPC is expected to pause the payment of interim dividends for eight months this year, from May to December.
Interim dividends, based on inflow projections are usually remitted monthly into the federation account and shared by the three tiers of government while the final dividends are paid at the end of the year after reconciliation.
Under the Petroleum Industry Act (PIA), the NNPC is obligated to pay taxes and royalties as well as dividends to the federation, its sole shareholder.
Meanwhile, this development is coming amid Tinubu’s declaration, “Fuel Subsidy,Gone!” on the day of his inauguration.
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