NEWS
Tinubu Approves NNPC’s Plan To Spend Federation Dividends On Petrol Subsidy
President Bola Tinubu has approved a measure allowing the Nigerian National Petroleum Company (NNPC) Ltd to allocate the 2023 final dividends due to the federation to cover petrol subsidy expenses.
To bolster NNPC’s cash flow, the president has also sanctioned the suspension of 2024 interim dividend payments.
Additionally, NNPC has notified the president of its inability to remit taxes and royalties to the federation account due to the financial strain caused by the subsidy payments, which it has termed “subsidy shortfall/FX differential.”
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Forecasts from NNPC suggest that the cumulative petrol subsidy bill, which started in August 2023, could reach N6.884 trillion by December 2024. This would result in a deficit of N3.987 trillion in taxes and royalties owed to the federation account.
The total amount of dividends to be withheld or suspended has not been disclosed. NNPC plans to pause interim dividend payments from May to December this year.
Interim dividends, based on monthly inflow projections, are typically shared among the three tiers of government, while final dividends are settled at year-end following reconciliation.
Under the Petroleum Industry Act (PIA), NNPC is required to remit taxes, royalties, and dividends to the federation, its sole shareholder.
However, in June 2024, NNPC alerted President Bola Tinubu that its cash flow was under severe pressure due to the burden of subsidy payments, which threatened the company’s financial stability.
NNPC expressed concerns that it might be unable to sustain petrol imports as the rising subsidy costs, driven by “forex pressure,” continued to escalate.
TheCable reports that Mele Kyari, NNPC’s Group CEO, informed the president that the removal of the subsidy in June 2023 resulted in monthly savings of N400 billion for the federation.
This enabled NNPC to deposit N2.032 trillion in taxes and royalties into a secured account at the Central Bank of Nigeria (CBN) by January 2024.
Kyari explained that the situation worsened following the naira’s devaluation, leading to a continuous rise in the NAFEX exchange rate.
By August 2023, NNPC’s fuel importation costs had shifted from surplus to deficit, resulting in a subsidy bill of N52.73 billion.
This figure rose to N57.59 billion in September, N212.28 billion in October, and surged to N665.60 billion in November as the exchange rate more than doubled from when the subsidy was initially removed.
The subsidy bill slightly decreased to N537.66 billion in December but spiked again to N693.67 billion by January 2024.
In February, the bill dropped to N592.09 billion and further declined to N497.39 billion in March.
However, it surged once more to N833.68 billion in April, prompting Kyari to issue an urgent appeal to the president.
He stated that the mounting costs have placed “undue pressure” on NNPC, preventing it from remitting taxes and royalties to the federation account.
Kyari also warned that the country’s energy security is at risk, as NNPC may struggle to maintain petrol imports “beyond July 2024.”
In presenting his case to the president, Kyari highlighted that NNPC had implemented various strategies between August 2023 and April 2024, but the situation remained dire.
The measures included enhancing oil production by tackling theft and vandalism, rescheduling debts and initiating forward sales, deferring payments to suppliers and contractors, postponing non-essential projects, and intensifying debt recovery efforts.
Despite these interventions, projections indicated a worsening cash flow deficit driven primarily by the exchange rate fluctuations.
According to NNPC, while an estimated N3.987 trillion in taxes and royalties is expected to be owed to the federation account by December 2024, the company would still face an outstanding N2.897 trillion after reconciling its obligations and subsidy shortfalls.
Kyari urged President Tinubu to approve the use of the 2023 final dividends due to the federation and to delay the 2024 interim dividends to offset the subsidy costs.
It was understood that Tinubu granted Kyari’s request on June 6, 2024.
Recall that in August 2023, when President Tinubu was considering reintroducing the petrol subsidy, his spokesman, Ajuri Ngelale, promptly denied the claim, insisting there was no reversal on the new policy.
However, internal communications between NNPC and the president now frequently reference the term “subsidy.”
It is believed that the All Progressives Congress (APC) government prefers to avoid the term due to its historical use as a key argument against the Peoples Democratic Party (PDP) during the 2015 election campaign, when the “subsidy scam” narrative helped dislodge the PDP from power.
During the Muhammadu Buhari administration, the term “under recovery” was used as a substitute for “subsidy,” although the word “subsidy” eventually reappeared in official discourse later on.
The Tinubu administration’s official stance is that “subsidy is gone.” Despite this, NNPC projects that over N5 trillion will be spent on subsidy payments this year alone.
When the subsidy was initially removed in June 2023, the exchange rate stood at N463/$, but it has since surged to approximately N1,500/$. Combined with high crude oil prices, this has created a “double whammy” for NNPC in managing fuel import costs.
NNPC utilizes a “derived FX rate” to keep petrol prices between N600 and N700 per litre. The gap between this derived rate and the official exchange rate represents the subsidy or FX differential.
Hundreds of pensioners in Benue State on Wednesday took to the streets of Makurdi to protest the non-payment of gratuities, pension arrears and the failure of the government to harmonise pension payments, lamenting that many retirees are dying due to hardship and lack of access to healthcare.
The protesters, under the umbrella of the Concerned Pensioners Association of Benue State, staged a peaceful demonstration and threatened to occupy the Benue State Government House if their demands continue to be ignored.
Carrying placards with inscriptions such as “Pay Us Our Pension, Our Members Are Dying” and other messages demanding justice, the retirees expressed frustration over what they described as years of neglect and broken promises.
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Speaking during the protest, the association’s chairman, Akosu Orban, said pensioners had exhausted all avenues of dialogue with the state government without achieving any meaningful result.
“We have exhausted all avenues for dialogue and resolution with the Benue State Government over our demands without success. That is why we have decided to embark on this peaceful protest,” he said.
According to Orban, gratuities dating back to the year 2000 remain unpaid, while pension arrears owed to state retirees stand at 38 months and those owed to local government retirees have accumulated to 62 months.
He also raised concerns over the non-harmonisation of pensions, claiming that some retirees still receive as little as N2,000 monthly despite existing provisions for improved pension payments.
“It may interest you to know that some pensioners who retired many years ago are still being paid N2,000 monthly pension. If pensions were properly harmonised, they should be receiving up to N40,000 per month,” he stated.
The pensioners lamented that the prolonged delay in settling their entitlements has pushed many retirees into extreme poverty.
“Pensioners are dying on a daily basis because they cannot afford drugs and special diets required for age-related ailments. We have become scavengers, beggars and destitute in the land we served diligently,” Orban added.
The association accused the administration of Governor Hyacinth Alia of failing to fulfil promises allegedly made during the 2023 election campaign to clear pension arrears and gratuities within 100 days of assuming office.
The retirees further alleged that they withdrew several court cases against the government after receiving assurances that outstanding payments would be settled on a first-retired, first-paid basis, only for those promises to remain unfulfilled.
Warning that their patience was running out, the protesters vowed to escalate their action if their demands were not addressed.
“We are hungry and angry. If our concerns are not addressed, we will have no option than to occupy the Benue State Government House until justice is done to pensioners,” Orban declared.
Responding to the protest, Benue State Commissioner for Finance, Michael Oglegba, said the current administration inherited pension and gratuity liabilities estimated at N300 billion.
He noted that the government was making efforts to settle the obligations despite limited resources.
“That is what we inherited, but we are doing our very best to pay what we can. They have the right to demonstrate, but government, in its wisdom, is doing its best,” Oglegba said.
The commissioner added that the administration had fully paid gratuities of workers who retired since it assumed office in 2023, while also working to reduce the backlog inherited from previous administrations.
The protest highlights the growing frustration among pensioners in Benue State, many of whom say years of unpaid entitlements have left them struggling to survive.
A total of 268 Nigerians evacuated from South Africa following recent xenophobic attacks are expected to arrive in Lagos today as the Federal Government intensifies efforts to protect its citizens abroad.
The returnees, who form the first batch of those seeking voluntary repatriation, are being transported aboard an Air Peace evacuation flight scheduled to land at the Murtala Muhammed International Airport, Lagos, at about 5:00 a.m.
The Minister of State for Foreign Affairs, Ambassador Sola Enikanolaiye, is expected to receive the evacuees on behalf of the Federal Government upon their arrival.
This was disclosed in a statement issued by the spokesperson of the Ministry of Foreign Affairs, Kimiebi Imomotimi Ebienfa, who said the Acting High Commissioner of Nigeria in Pretoria, Ambassador Alexander Ajayi, would accompany the returnees and formally hand them over to Nigerian authorities.
The evacuation follows renewed xenophobic attacks in South Africa, which have left many foreign nationals, including Nigerians, fearful for their safety and seeking a return to their home countries.
According to the ministry, the ongoing screening exercise for Nigerians willing to return home voluntarily has been extended until Sunday, June 14, 2026, to enable more affected citizens to participate in the evacuation programme.
The ministry said the extension underscores the Federal Government’s commitment to the welfare, safety and protection of Nigerians living overseas.
It also assured that relevant Ministries, Departments and Agencies (MDAs) have made adequate arrangements for the reception, documentation and support of the returnees upon arrival.
The latest evacuation marks another chapter in the long-standing concerns over xenophobic violence in South Africa, where Nigerians and other African migrants have periodically faced hostility, attacks and displacement.
Federal authorities have reiterated their commitment to safeguarding the interests of Nigerians abroad while continuing diplomatic engagements aimed at addressing the situation and ensuring the safety of affected citizens.
A coalition of civil society organisations, activists, labour groups and youth movements has declared June 12, 2026, a day of nationwide protest against worsening insecurity, economic hardship and deteriorating living conditions across Nigeria.
The protest, scheduled to coincide with the country’s Democracy Day celebration, is being championed by prominent human rights lawyer Femi Falana and popular musician-turned-activist Falz, alongside several civil society leaders and advocacy groups.
In a joint statement released ahead of the demonstration, the coalition expressed concern over what it described as the growing suffering of Nigerians amid rising insecurity, inflation and poverty.
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According to the group, millions of citizens have little reason to celebrate Democracy Day as many communities continue to battle terrorism, banditry, kidnapping and other violent crimes.
The statement was jointly endorsed by Falana, National Chairman of the Alliance on Surviving COVID-19 and Beyond (ASCAB); Hassan Taiwo Soweto of the #EndBadGovernance Movement; Yinka Folarin of the Committee for the Defence of Human Rights (CDHR); Falz and several other civil society advocates.
The coalition lamented that innocent Nigerians are being killed, abducted and displaced while many families continue to live in fear due to the worsening security situation across the country.
“The Nigerian people deserve a government that places the protection of lives and property at the centre of governance,” the coalition stated.
The group further demanded the immediate release of citizens currently being held captive by kidnappers and criminal groups in various parts of the country.
It also criticised what it described as inadequate responses to insecurity despite repeated assurances by authorities that the situation was improving.
According to the coalition, schools remain vulnerable to attacks, farmers face challenges accessing their farmlands and many major highways are still considered unsafe for travellers.
Beyond security concerns, the coalition highlighted the growing economic hardship facing Nigerians, citing rising fuel prices, currency devaluation, increased electricity tariffs and the soaring cost of essential goods and services.
The statement noted that food prices have continued to rise sharply, making it increasingly difficult for families to meet their basic needs.
It added that transportation costs have become unbearable for many citizens, while small and medium-sized businesses are struggling to survive due to high operating costs, unstable electricity supply and declining consumer purchasing power.
The coalition also expressed concern over stagnant wages and persistent inflation, arguing that workers’ incomes can no longer adequately support their households.
Explaining the purpose of the June 12 protest, the organisers said the nationwide action is intended to compel the government to take urgent and practical steps to tackle insecurity and implement policies that will ease the economic burden on citizens.
The coalition called on workers, students, traders, artisans, market women, professionals, unemployed youths, religious organisations and labour unions to mobilise and participate peacefully in the demonstration.
“The time has come for Nigerians to speak with one voice and demand security, dignity and a decent standard of living. Enough of the killings. Enough of the kidnappings. Enough of the hunger. Enough of the suffering,” the statement added.
The organisers described the planned protest as a democratic expression of citizens’ frustrations and a collective demand for a safer and more prosperous Nigeria.
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