The World Bank has said the Nigeria National Petroleum Corporation Limited (NNPCL) has not been transparent on the proceeds from oil subsidy removal.
The Washington-based world lender made the statement in the December 2023 edition of Nigeria’s Development Update, titled, ‘Turning The Corner (from reforms and renewed hope, to results).
The World Bank noted that the lack of transparency of the NNPCL extends to subsidy arrears that are still being deducted and the impact of subsidy removal on Nigeria’s revenues.
Nigeria’s Minister of Finance and Coordinating Minister of Economy, Wale Edun, had stated that the government was prepared to examine the NNPCL revenue flow.
The World Bank claims that although there are obvious income gains from the exchange rate reforms, further information is required regarding oil revenues, including the fiscal gains from the PMS subsidy reforms.
It affirmed, “nominal oil revenue gains have been evident since June; these are mostly categorised as “exchange rate gains”, suggesting that they are due to the naira depreciation.
“Except for the exchange rate-related increases, however, there is a lack of transparency regarding oil revenues, especially the financial gains of the Nigeria National Petroleum Corporation from the subsidy removal, the subsidy arrears that are still being deducted, and the impact of this on Federation revenues.
“It is also unclear why retail petrol prices have not changed much since August, despite fluctuations in the exchange rate and global oil prices.”