The World Bank has revealed that the Nigerian National Petroleum Company Limited (NNPCL) failed to remit approximately N500 billion to the Federation Account Allocation Committee (FAAC) in 2024, despite significant revenue gains from the removal of fuel subsidies.

According to the latest Nigeria Development Update (NDU) released on Monday, NNPCL remitted only N600 billion out of the N1.1 trillion revenue generated from crude sales and other income in 2024. This represents a significant drop from the N1.1 trillion remitted in 2023.

The Bretton Woods institution attributed this sharp decline to the "implicit subsidy regime that persisted until the third quarter of 2024" and highlighted concerns over fiscal transparency and revenue management following the deregulation of the downstream petroleum sector by President Bola Ahmed Tinubu's administration in October 2024.

"Although the subsidy was fully removed on October 1, 2024, NNPCL did not start transferring the resulting revenue gains to the Federation until January 2025. From that point, it began remitting 50 percent, with the other half being used to settle past arrears," the report stated.

The World Bank further noted that despite a substantial increase in gross revenues by Nigeria's main revenue-generating agencies from N16.5 trillion in 2023 to N29.5 trillion in 2024, NNPCL's remittance declined significantly.

To address these concerns, the World Bank has recommended that NNPCL implement full remittance of fuel subsidy revenue gains to ensure complete transparency in the subsidy removal process.

This revelation comes at a time when Nigeria continues to face economic challenges, with the government seeking to maximize revenue streams to fund critical infrastructure and social programs.

The NDU report has raised questions about the management of oil revenues and the effectiveness of the fuel subsidy removal policy, which was implemented to boost government finances and promote economic stability.