The Nigerian National Petroleum Company Limited (NNPCL) is once again at the center of a financial storm as new figures show that the company has failed to remit any dividend to the Federation Account in 2025, despite clear stipulations under the Petroleum Industry Act (PIA) and budgetary projections of more than N2 trillion.
Fresh analysis by Agora Policy, the Abuja-based think tank, has revealed the scale of the shortfall and the implications for Nigeria’s fragile public finances. Drawing on Federation Account Allocation Committee (FAAC) data, the group reported that in the first eight months of 2025, NNPCL has met only 15 percent of its revenue target to the Federation and has completely withheld all calendarised interim dividend payments, which should by now have amounted to ₦2.17 trillion.
The revelations cut to the heart of the PIA, which promised to reform the country’s oil industry, improve transparency, and ensure predictable revenue flows to the government. Instead, the data points to a worrying trend in which the national oil company retains vast sums of money while the Federation Account—on which all tiers of government depend—struggles with shortfalls.
The August 2025 FAAC report paints a stark picture. A total of ₦263.13 billion was generated from production sharing contract (PSC) profit oil in that month, yet the distribution shows how little of that eventually reached the Federation. Of the entire amount, the Federation received ₦105.25 billion, equivalent to just 40 percent. NNPCL, under provisions of the PIA, took ₦78.94 billion as a management fee, while another ₦78.94 billion was retained for the Frontier Exploration Fund. The result was that NNPCL walked away with 60 percent of the proceeds, while the Federation was left with less than half.
The picture becomes even more troubling when considered against the backdrop of dividend payments. In August 2025, NNPCL paid nothing as an interim dividend, despite projections that ₦271.18 billion should have been remitted for that month alone. Year to date, the shortfall has ballooned to ₦2.17 trillion, representing a complete failure to meet obligations under the federal budget.
Agora Policy’s assessment underscores the seriousness of the situation. The think tank notes that NNPCL has so far delivered only 67 percent of the Federation’s share of PSC profit oil and has completely withheld dividends that were supposed to serve as the replacement for Federation equity oil. For decades, equity crude oil was the largest single source of oil revenue for the government. The PIA abolished that arrangement and replaced it with dividends from NNPCL, calculated from 80 percent of the company’s profit after tax. The intention was to create a more commercial, efficient, and transparent model. The practical outcome has been very different: with no dividends paid, the Federation Account is starved of revenue it desperately needs.
The scale of the underperformance is captured in comparative data released by Agora Policy. Between January and August 2025, the budgeted contribution from PSC profit oil was ₦631.57 billion, but actual remittance was ₦424.07 billion, leaving a 33 percent gap. Even more significant was the expectation that NNPCL would pay ₦2.17 trillion in dividends within that period, but not a single naira was received. Taken together, NNPCL has transferred less than ₦424 billion against a total budget target of ₦2.8 trillion.
The implications for the economy are profound. FAAC allocations remain the lifeblood of both the federal and state governments, funding salaries, infrastructure, and social services across the country. Withholding ₦2 trillion in expected dividend revenue deepens fiscal stress at a time when Nigeria faces high inflation, currency pressures, and mounting debt servicing obligations. For many states already struggling to balance their books, the shortfall may mean more borrowing or delays in critical payments.
The controversy is not just about numbers; it strikes at the credibility of the PIA itself. When the law was passed in 2021, it was heralded as the most significant reform of Nigeria’s oil and gas sector in decades. Among its most important provisions was the transformation of NNPC into NNPCL, a limited liability company expected to operate commercially, compete globally, and pay dividends to its shareholders, the Federation. Dividends, according to the architects of the law, were to serve as the new mechanism for ensuring government revenue after the phasing out of equity oil.
But as the 2025 data show, the company has fallen short of this vision. By retaining revenues as management fees and for frontier exploration while failing to remit dividends, NNPCL appears to have reversed the spirit of the PIA. Instead of creating a predictable and transparent flow of funds to the Federation, the reform has opened new avenues for the company to hold back revenues while the government struggles with a funding crisis.
Critics argue that this undermines not just fiscal planning but also accountability. In August alone, NNPCL retained nearly ₦79 billion as a management fee and the same amount for frontier exploration. Together, these sums equaled the Federation’s share of the PSC profit oil. For many observers, this raises serious questions about whether the Federation is getting value for money from its own national oil company.
The think tank’s findings have already triggered calls for greater scrutiny of NNPCL’s finances. Civil society groups and some economists are pressing for an independent audit of the company’s books to determine why no dividends have been paid despite budgetary provisions and the company’s substantial control over oil revenues. States, too, are expected to raise the matter at subsequent FAAC meetings, as they grapple with dwindling allocations in the face of rising obligations.
For the federal government, the controversy represents a test of its commitment to enforcing the PIA. If NNPCL is allowed to continue withholding dividends without consequence, critics warn, the credibility of the entire reform framework will be in jeopardy. Moreover, it risks entrenching the same opacity and inefficiency that the PIA was meant to eradicate.
The stakes are high not just for fiscal stability but also for Nigeria’s broader economic trajectory. With oil still the country’s primary source of foreign exchange and revenue, any breakdown in the mechanisms designed to capture and distribute those earnings has cascading effects across the economy. Already, the absence of dividend payments is feeding into budget deficits, weakening the naira, and limiting government capacity to fund capital projects.
In the months ahead, much will depend on whether NNPCL reverses course and begins paying the dividends stipulated in the budget. But with eight months already gone and no remittances recorded, the likelihood of meeting the ₦2.17 trillion target for 2025 looks slim. That prospect leaves the Federation facing an even deeper fiscal hole and raises questions about the viability of the reforms introduced under the PIA.
