President Bola Tinubu has granted approval for the Nigerian National Petroleum Company Limited (NNPCL) to utilize the 2023 dividends owed to the federation for the purpose of funding petrol subsidies, as reported by TheCable.
Additionally, the president has sanctioned the postponement of the 2024 interim dividends to the federation to support the oil company’s cash flow.
Despite Tinubu’s declaration of the elimination of fuel subsidies during his inaugural speech on May 29, 2023, there are persistent indications that the government continues to allocate substantial funds towards subsidies.
Nevertheless, the Federal Government has repeatedly denied any subsidy payments. Recently, when protests erupted across the nation due to economic hardships, one of the protesters’ demands was the reinstatement of the subsidy.
However, in a national address, Tinubu firmly rejected the idea of reinstating the subsidy, characterizing the decision to eliminate it as a difficult yet essential measure. He described the subsidy as a “noose around the economic jugular of our Nation,” which has impeded economic growth and advancement.
A report released on Monday indicated that Tinubu authorized NNPCL to cover subsidy costs after the company reported that it had exhausted all measures to ensure a consistent gasoline supply in the country.
These measures included enhancing oil production by combating theft and vandalism, rescheduling debts, deferring payments to suppliers and contractors, postponing non-essential projects, and recovering debts, among others.
The government oil company informed the president that these strategies had not alleviated the issue, stating that it would no longer be able to contribute funds to the Federation Account.
Consequently, President Tinubu has instructed the company to allocate taxes, royalties, and other funds intended for the Federation Account to cover the fuel subsidy expenses. This approval was reportedly granted on June 6, 2024.
