The Nigerian National Petroleum Co. Ltd (NNPCL) has only been sending 50% of profits gained from the removal of petrol subsidies to the federation account, according to the World Bank, which released its latest Nigeria Development Update report on Monday, May 12.

In the report, the World Bank noted that the NNPCL had only started transferring revenue gains in January.

“Since then, it has been remitting only 50% of these gains, using the rest to offset past arrears,” it said.

Since the removal of petrol subsidies in 2023 by President Bola Tinubu, concerns about the transparency of the Nigerian oil sector have increased – particularly when referencing the management of subsidy gains, according to Premium Times.

In April, the International Monetary Fund (IMF) called for more transparency in the management of the Nigerian oil sector, with an official saying: “We have been commending bold reforms by the government, but we need to see a little more transparency in the oil sector to ensure that fuel subsidy removal can result in more flow of resources into government coffers”.

The World Bank report highlights similar concerns, noting that for Nigeria to benefit from economic reforms, the country needed to allow for the transfer of all revenue gains from the removal of petrol subsidies (around 2.6% of GDP in 2024) to government coffers.

It continued: “Resolving any remaining net arrears and channelling the full benefits of subsidy reform to the Federation is critical for sound fiscal management”.

The NNPCL has been under scrutiny for several months following allegations of corruption, with Tinubu removing and replacing the state-owned company’s entire leadership board last month – switching CEO Mele Kyaria and board chairperson Pius Akinyelure with Bayo Ojulari and Ahmadu Kida respectively, among others.

Separate investigations conducted by the EFCC are also ongoing regarding alleged misappropriation of funds by the NNPCL’s top officials, including former CEO’s Kyari and Abubakar Yar’Adua, according to Premium Times.