The Nigerian National Petroleum Company Limited (NNPCL) has requested an additional ₦1.19 trillion subsidy refund for July 2024. The request is based on Premium Motor Spirit importation exchange rate differentials and joint venture taxes.
However, state governments querying the NNPCL’s accounting practices. The Federation Account Allocation Committee (FAAC) Postmortem Sub-Committee report revealed discrepancies in the figures submitted by NNPCL.
According to the report, exchange rate differentials stood at ₦4.56 trillion as of June 2024. This figure increased to ₦5.31 trillion by July 2024, with NNPCL attributing fluctuations in foreign exchange rates and unresolved subsidy payments.
The FAAC Sub-Committee raised concerns over NNPCL’s accounting practices, noting that the ₦1.19 trillion balance brought forward should have been included in earlier FAAC reports. The Sub-Committee recommended that NNPCL re-submit the figure for consideration.
This development contradicts the government’s claims that subsidies have been eliminated. President Bola Tinubu publicly declared that “subsidy is gone” during his inauguration in May 2023.
However, the International Monetary Fund, the World Bank, and other authoritative figures have argued that the government quietly reintroduced fuel subsidies.
The NNPCL’s request for an additional subsidy refund has raised concerns over the fiscal impact of subsidy payments on the Federation Account. The government’s subsidy claims have been contested, and the increasing cost burden on the government for petrol under-recovery has raised questions about the sustainability of the partial subsidy framework.
The Federal Government planned to spend about ₦5.4 trillion on fuel subsidies in 2024. The ₦5.31 trillion demanded by the NNPCL for petrol under-recovery is about 98.33% of what the Government planned to spend on fuel subsidies this year.
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