President Bola Tinubu has approved the dividends of the Nigerian National Petroleum Company (NNPC) Limited for the payment of fuel subsidies.
The President directed NNPC to use the 2023 final dividends owed to the federation to cover the cost of petrol subsidies.
According to BusinessDay, Tinubu also approved a halt on the payment of 2024 interim dividends to the federation to help boost NNPC’s cash flow.
It was gathered that the NNPC informed the president that, due to the subsidy payments, it is currently unable to pay taxes and royalties into the federation account, referring to this as a “subsidy shortfall/FX differential.”
A forecast from NNPC indicated that the 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 that would be withheld or put on hold could not be verified as at the time of publishing this report.
DAILY GIST reports that the development is coming amidst the return of Petrol scarcity and queues in the country.
The scarcity led to disruption of commercial and social activities at the weekend in Abuja and the country’s commercial capital of Lagos, as well as Kaduna, Kano, Port Harcourt, Niger, Nasarawa, and several other states.
Many filling stations shut down their operations due to the severe undersupply of PMS.
The NNPCL attributed the scarcity to “distribution” challenges.
It, however did not state the cause of the current spike, which had lingered in Abuja and environs for over four weeks.
