In a surprising move, President Bola Tinubu has approved the use of 2023 dividends to pay for petrol subsidy, contradicting his earlier announcement to remove fuel subsidy. The approval was given to the Nigerian National Petroleum Company Limited (NNPCL) on June 6, 2024.
Despite Tinubu’s inaugural address on May 29, 2023, where he announced the removal of fuel subsidy, the government has continued to spend billions on subsidy. The Federal Government has consistently denied paying subsidy, but strong indications suggest otherwise.
NNPCL had complained of exhausting strategies to ensure stable gasoline supply, including improving oil production, debt rescheduling, and payment deferrals. The company forecasted total petrol subsidy expenses of N6.884 trillion from August 2023 to December 2024, leaving it unable to remit N3.987 trillion in taxes and royalties.
This move has sparked controversy, as Nigerians had demanded the reinstatement of subsidy during recent protests against nationwide hardship. Tinubu had ruled out the return of subsidy in his national broadcast, describing it as a “noose around the economic jugular of our Nation”.
The exact amount of dividends to be withheld or put on hold remains unverified. The development raises questions about the government’s commitment to economic reform and transparency.