The Nigerian National Petroleum Corporation, NNPCL should be transparent with Nigerians on the proceeds from fuel subsidy removal, the World Bank says.
According to the United States of America-based financial institution, the government-owned oil company has not been transparent enough in declaring what accrued from the removal of the petrol subsidy since May this year.
The Brenton Wood agency said this is necessary for Nigerians who have enjoyed the pains of petrol subsidy removal to enjoy its gains.
The assertion was made on Wednesday by the World Bank Country Director for Nigeria, Dr. Shubham Chaudhuri, at the launch of the Nigeria Development Update, NDU, titled “Turning the Corner, Time to Move from Reforms to Results”.
Chaudhuri’s assertion comes on the heels of criticism by a former Emir of Kano, Sanusi Lamido Sanusi, on the NNPCL over its failure to remit enough funds into the federal government’s coffers from crude oil sales.
The former Governor of the Central Bank of Nigeria, CBN, had accused the Mele Kyari-led oil firm of not remitting enough dollars to the federal government, saying this is responsible for the scarcity of dollars in the country.
Speaking yesterday, Chaudhuri, stated that between N300 billion –N400 billion was expended on fuel subsidy monthly before the removal in June, saying such funds should been paid into the purse after the removal.
This has not been done so far, the World Bank chief said.
According to him, “The basic point I think our team has been trying to understand is premium motor spirit (PMS) subsidies earlier were costing about N400 billion per month, and now are those revenues now coming into the federation account, or has oil production dropped to the point where those N400 billion in revenues has gone and it’s really about helping us.
“But not just as the Nigerian public understand because a lot of the Nigerian public view the removal of PMS subsidies is well, we’re going through this pain, is there a reward from that? I think that’s the main thing, and the NNPCL can just clarify what exactly is happening with the funds coming. That would really help.”
He explained that now that the subsidy has been removed, Nigerians should enjoy the benefit, adding that the NNPCL should be made accountable.
He said the country is expected to save close to N11 trillion from subsidy removal between now and 2025, calling on NNPCL to publish its financial accounts regularly.
He said, “The petrol subsidy and FX management reforms are critical steps in the right direction towards improving Nigeria’s economic outlook. Now is the time to truly turn the corner by ensuring coordinated fiscal and monetary policy actions in the short to medium term.
“Continued reform implementation can ensure that Nigeria benefits from the difficult adjustments underway. This includes ensuring that improved oil revenues following the sharply increased PMS price accrue to the Federation. In the medium-term, the economy will then begin to benefit from increasing fiscal space for development spending, including on power and transport infrastructure, as well as on human capital.
“The removal of the subsidy was announced on May 29 and pump prices were adjusted on June 1.
“This results in expected fiscal savings of around N2 trillion in 2023 or 0.9 per cent of GDP.
“Between 2023 and 2025, the expected gains are over N11 trillion, against a scenario in which the subsidy had continued.
“Publish detailed financial statements and revenue flows of NNPCL to safeguard the fiscal savings from the subsidy reform and ensure that oil revenues flow to the Federation (Account).”
Not a few Nigerians have criticized the NNPCL for the opaque manner its manages proceeds from crude oil.
The Group Chief Executive of the company, Mele Kyari informed the Nigerian Senate last week during the 2024 Budget hearing that the daily crude oil sales cannot be ascertained.
