President Bola Tinubu has agreed to let the Nigerian National Petroleum Company Limited (NNPCL) use the 2023 dividends meant for the country to pay for fuel subsidies, according to TheCable.
He also allowed the NNPCL to hold off paying the 2024 dividends to the government to help with the company’s cash flow.
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Even though Tinubu announced the removal of fuel subsidies on May 29, 2023, it seems the government is still spending a lot of money on subsidies.
However, the Federal Government has repeatedly denied paying for subsidies.
A few weeks ago, some Nigerians protested against the hardship in the country, demanding the return of the subsidy.
But in a national speech, Tinubu said bringing back the subsidy was not an option, calling its removal a difficult but necessary choice.
He described the subsidy as something that had been holding back the nation’s economic growth.
On Monday, an online newspaper reported that Tinubu approved the payment of the subsidy after NNPCL complained that it had tried many ways to keep the country supplied with fuel but had run out of options.
These efforts included increasing oil production by stopping theft and vandalism, rescheduling debts, delaying payments to suppliers and contractors, postponing non-essential projects, and recovering debts.
NNPCL told the president that these efforts had not solved the problem, and without the subsidy, the company wouldn’t be able to pay money into the government’s account.
So, Tinubu directed the company to use the taxes, royalties, and other funds it would usually pay to the government to cover the cost of the subsidy.
This approval was reportedly given on June 6, 2024.According to NNPCL’s forecast, the total cost of fuel subsidies from August 2023 to December 2024 will be N6.884 trillion, leaving the company unable to pay N3.987 trillion in taxes and royalties to the government.
The exact amount of dividends that will be withheld is still unclear.