President Bola Tinubu has approved the use of the 2023 final dividends owed to the federation by the Nigerian National Petroleum Company (NNPC) Limited to cover the cost of petrol subsidies.
Additionally, the president has halted the payment of 2024 interim dividends to the federation to boost NNPC’s cash flow.
NNPC has informed the president that due to subsidy payments, it is currently unable to pay taxes and royalties into the federation account, citing a “subsidy shortfall/FX differential.”
A forecast from NNPC indicates that total petrol subsidy expenses from August 2023 to December 2024 will amount to N6.884 trillion, leaving the company unable to remit N3.987 trillion in taxes and royalties to the federation account.
The exact amount of dividends to be withheld or put on hold is yet to be verified. This development comes as NNPC faces challenges in paying taxes and royalties due to subsidy payments.
