World Bank Slams NNPCL Over Lack Of Transparency In Fuel Subsidy Revenue

The World Bank has disclosed that the Nigerian National Petroleum Company Limited is not being transparent about the fiscal gains from from fuel subsidy removal.

The apex development bank disclosed this in its Nigeria Development Update, NDP, December 2023 edition titled ‘Turning the Corner: Time to Move From Reforms to Results’.

According to the World Bank, while revenue gains from Nigeria’s exchange rate reforms are visible, more clarity is needed on oil revenues, including the fiscal benefits from the Premium Motor Spirit subsidy reforms.

It declared, “nominal oil revenue gains have been evident since June; these are mostly categorised as “exchange rate gains”, suggesting that they are due to the naira depreciation.

“Except for the exchange rate-related increases, however, there is a lack of transparency regarding oil revenues, especially the financial gains of the Nigeria National Petroleum Corporation from the subsidy removal, the subsidy arrears that are still being deducted, and the impact of this on Federation revenues. It is also unclear why retail petrol prices have not changed much since August, despite fluctuations in the exchange rate and global oil prices.”

The Bretton Woods institution further expanded that gains in net oil revenue of the federation were lower than what they should have been considering what the removal of fuel subsidy should have added to the accounts.

It stated that fuel subsidy cost the federation about N380bn a month, and once removed, the federation account should have recorded an increase in net oil revenues.

A former Central Bank of Nigeria governor, Lamido Sanusi, raised a similar alarm a week ago about the opaqueness of revenues from NNPCL.

Meanwhile, speaking during the Senate Committee on Finance sitting on Wednesday, the Group Chief Executive Officer of NNPCL, Mr Mele Kyari, said the company remitted N4.5 trillion to the federation account from January to October 2023.

Recall that in June 2023, President Bola Ahmed Tinubu’s administration announced the removal of fuel subsidy and forex reforms.

The dual economic policy reforms contributed to the October inflation rate hike to 27.33 per cent.