Despite Making Highest Profit in History, NNPCL Remitted Zero Funds to Federation Account In 2022
- The Nigerian National Petroleum Company Limited (NNPCL) confirmed it did not make a remittance to the Federation Account in 2022
- NNPCL blamed payment of petrol subsidy for its lack of payment into the federation account
- The company said it began to make a profit immediately after President Tinubu removed the subsidy
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Pascal Oparada has over a decade of experience covering Tech, Energy, Stocks, Investments, and Economy.
The Nigerian National Petroleum Company Limited (NNPCL) made zero allocation to the Federation Account in 2022 due to subsidy payments on petrol.
The company’s Chief Financial Officer, Umar Ajiya, disclosed this in a documentary.
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Subsidy payment halts NNPC from making profit
The NNPCL is a primary revenue-generating agency in Nigeria as it manages and sells Nigeria’s crude oil and gas, among other essential functions.
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In a video released by the oil firm on Sunday, January 28, 2023, Ajiya said fuel subsidy stopped the company from remitting taxes and royalties to the Federation Account and halted it from making a profit.
The national oil firm said the fuel subsidy payment hindered its growth potential once a new administration came into power and ended the subsidy on petrol, saving the company from bankruptcy and setting it on the path to profitability.
NNPCL said the move enabled the oil company to grow its profit from N674.1 billion in 2021 to N2.54 trillion by Q3 2022.
President Bola Tinubu ended petrol subsidy when he assumed office on May 29, 2023.
NNPC now makes N400 billion in profit monthly
Ajiya said the president’s action saved the country about N400 billion monthly.
Punch reports that the petrol subsidy consumed over N3.3 trillion in 2022 as the Nigerian government grappled to hold the cost of the product below its global market price.
Petrol costs spiked by over 250% immediately after Tinubu removed the subsidy.
The NNPC’s Chief Finance Officer confirmed that removing subsidies made fund remittance to the Federation account possible.
He said the oil firm has begun the payment of dividends to the federation and is paying its due obligations in taxes and royalties.
Ajiya said ending the subsidy allowed it to contribute N4.5 trillion to the Federation Account in nine months.
NNPCL makes highest ever profit in 47 years
Legit.ng reported that the Nigerian National Petroleum Company Limited (NNPCL) disclosed on Tuesday, January 9, 2024, that it made a profit of N2.548 trillion in 2022, describing it as the highest profit since it began operations 47 years ago.
The company is a state-owned oil corporation founded in 1977 and the largest holder in the Nigerian oil and gas industry. After Nigeria passed the Petroleum Industry Act by ex-President Muhammadu Buhari in August 2022, it began commercial operations.
The company posted a loss of N803 billion in 2018 in a one-page document.
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Source: Legit.ng
