By Abiola Olawale
The Nigerian National Petroleum Company Limited (NNPCL) is under intense scrutiny following a World Bank report which revealed the state-owned oil national company allegedly failed to remit N500 billion in revenue to the Federation Account in 2024.
The disclosure, detailed in the latest World Bank Nigeria Development Update report, has started eliciting concerns over fiscal transparency and revenue management in Nigeria’s oil sector.
According to the report, NNPCL reportedly remitted only N600 billion out of the N1.1 trillion generated from crude oil sales and other income in 2024, leaving a staggering N500 billion unaccounted for.
The World Bank noted that despite the full removal of the Premium Motor Spirit (PMS) subsidy in October 2024, NNPCL allegedly delayed transferring the consequent revenue gains to the Federation Account until January 2025.
Even then, the national oil company was said to have credited the federation Account with just 50% of the proceeds, attributing the shortfall to settling legacy arrears.
The report further revealed that NNPCL’s remittances dropped significantly from N1.1 trillion in 2023 to N600 billion in 2024, a decline attributed to the implicit PMS subsidy that persisted until September 2024.
The World Bank also emphasized that full remittance of subsidy savings is critical to Nigeria’s fiscal outlook, projecting that 70% of federal revenues in 2025 will come from oil.
The World Bank further called for a forensic audit of NNPCL’s operations to address the lack of transparency in its revenue reporting. The report urged the adoption of standardized reporting to the Federal Accounts Allocation Committee (FAAC) to ensure accountability.
Part of the report reads: “The fiscal outlook remains cautiously optimistic but hinges on the necessary consolidation of recent advances. First, it is essential to ensure that the full revenue gains from the removal of the PMS subsidy—estimated at 2.6 per cent of GDP in 2024—are transferred to the Federation.
“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.
“Gross FAAC revenues surged in 2024, but a large share was deducted and remitted back as revenues to states and local governments.
“Gross revenues collected by Nigeria’s main revenue agencies surged in 2024, despite minimal remittances from NNPCL. FAAC data show that gross revenues collected by the main revenue agencies (FIRS, NCS, NNPCL, and NUPRC) rose significantly from N16.5tn (7 per cent of GDP) in 2023 to N29.5tn (10.6 per cent of GDP) in 2024.
“The largest revenue increases came from FX-denominated sources that benefited from the removal of the FX subsidy, including oil revenues (royalties, taxes, signature bonuses), customs revenues, and the foreign trade-related component of VAT.
“However, NNPCL was the only laggard, remitting just N0.6tn to FAAC in 2024, down from N1.1tn in 2023, largely due to the implicit PMS subsidy, which remained in place until the end of September 2024. Although the subsidy was fully removed on October 1, 2024, NNPCL did not start transferring the resulting revenue gains to the Federation until January 2025. From that point, it began remitting 50 per cent, with the other half being used to settle past arrears.
“As of February 2025, the bank noted that NNPCL’s claimed arrears stood at N7.8tn, while the Federation’s claims totalled N6.1tn, leaving net arrears of N1.7tn still owed to the national oil company.
“Despite a sharp rise in gross revenues by the country’s main revenue-generating agencies from N16.5tn in 2023 to N29.5tn in 2024, NNPCL’s remittance fell to N600bn in 2024, down from N1.1tn in the previous year.”
