President Bola Ahmed Tinubu of Nigeria has authorized the Nigerian National Petroleum Company (NNPC) to use interim dividends owed to the federation to cover the expenses associated with petrol subsidies. This strategic decision also includes a temporary suspension of interim dividend payments to the federation, aimed at improving the financial liquidity of the NNPC.
The NNPC has cited its inability to meet tax and royalty obligations due to the financial strain caused by subsidy payments. This shortfall, referred to as the “subsidy shortfall/FX differential,” has led to significant fiscal challenges for the corporation.
According to a forecast obtained by the newspaper, the NNPC anticipates subsidy expenses totaling approximately N6.884 trillion from August 2023 through December 2024. This projected expenditure will likely prevent the NNPC from remitting an estimated N3.987 trillion in taxes and royalties to the federation account.
At the time of this report, the specific amount of dividends that will be withheld or delayed could not be confirmed.
