Tinubu Approves NNPC’s Use of Dividends for Petrol Subsidy

President Bola Tinubu has granted approval for the Nigerian National Petroleum Company (NNPC) Limited to utilize the 2023 final dividends owed to the federation to cover the cost of petrol subsidies. 

 

This decision reflects the president’s concern for alleviating the financial strain on citizens while ensuring that essential policies are enforced. 

 

The NNPC had previously reported to Tinubu that the soaring costs of petrol subsidies were severely impacting its cash flow, raising concerns about the company’s ability to sustain fuel imports. 

 

To address this, the president also instructed a temporary halt on the payment of 2024 interim dividends to the federal government, a move intended to boost NNPC’s cash reserves.

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The NNPC forecast indicates that petrol subsidy expenses between August 2023 and December 2024 will reach an alarming N6.884 trillion. 

 

This substantial expenditure is expected to leave the company unable to remit N3.987 trillion in taxes and royalties to the federation account. 

 

Acknowledging the NNPC’s struggles, Tinubu’s directive is seen as an effort to balance the immediate financial needs of the company with the longer-term goal of maintaining economic stability.

 

“Our focus must remain on easing the burden on our people while maintaining accountability in governance,” Tinubu says.

 

By pausing the payment of interim dividends from May to December 2024, NNPC is expected to enhance its cash flow, potentially stabilizing its operations and continuing fuel imports despite the high subsidy costs. 

 

The president’s approval of this strategy reflects his commitment to protecting citizens from the full brunt of economic pressures while ensuring that public funds are managed responsibly.