World Bank says NNPCL is remitting only half of its fuel subsidy savings
According to its latest Nigeria Development Update, the World Bank reports that Nigerian National Petroleum Company Limited (NNPCL) has been transferring only 50% of fuel subsidy removal savings to the Federation Account.
It said out of the N1.1tn revenue from crude sales and other income in 2024, the NNPCL only remitted N600bn, leaving a deficit of N500bn unaccounted for.
The report titled “Building Momentum for Inclusive Growth” reveals that NNPCL is using the remaining funds to settle debt arrears.
Despite the official subsidy removal, NNPCL delayed transferring the windfall to the Federation Account until January 2025 and has since remitted only half the proceeds.
The World Bank projects that 70% of Nigeria’s 2025 government revenue will come from oil, assuming full remittance of subsidy savings.
“Despite the subsidy being fully removed in October 2024, NNPCL started transferring the revenue gains to the Federation only in January 2025. Since then, it has been remitting only 50 per cent of these gains, using the rest to offset past arrears,” the World Bank stated.
NNPCL was the only underperforming revenue agency, remitting just N0.6 trillion to FAAC in 2024, down from N1.1 trillion in 2023, due to the implicit subsidy that continued until late 2024.
Brazil’s Petrobras is considering a return to Nigeria
Brazil’s state oil company, Petrobras, is seeking to re-enter Nigeria’s oil sector, with a specific interest in frontier deepwater acreage.
Stanley Nkwocha, Senior Special Assistant to the President on Media & Communications in the Office of the Vice President, said in a Wednesday statement that the company, which had previously wound down its operations at Nigeria’s Agbami Field, is now actively engaging with Nigerian authorities as part of broader efforts to revitalise bilateral cooperation ahead of the 2025 Nigeria-Brazil Strategic Dialogue Mechanism (SDM).
Read Also: Petrobras eyes return to Nigeria’s Oil Sector, targets Deepwater Acreage
Russia-Ukraine peace talks began without Putin and Trump
Trump and Putin are skipping the first direct peace talks between Russia and Ukraine in three years. Instead of attending himself, Putin is sending a team of experienced officials to Turkey.
Putin suggested on Sunday that Russia and Ukraine should meet for talks in Istanbul on Thursday “without any preconditions”. On Wednesday, the Kremlin announced their delegation would include presidential adviser Vladimir Medinsky and Deputy Defence Minister Alexander Fomin – but Putin himself would not attend.
After Russia announced its delegation, a U.S. official said Trump, who is currently visiting the Middle East, would not attend either. Trump had earlier said he was thinking about going.
While Putin never actually promised to attend in person, the absence of both the Russian and U.S. presidents makes a major breakthrough in the war less likely.
The US is preparing to cut capital requirements for banks
US regulators plan to announce one of the biggest reductions in bank capital requirements in over a decade, according to a Financial Times report on Thursday.
Officials are getting ready to lower the supplementary leverage ratio (SLR) in the coming months, the newspaper reported, citing several people with knowledge of the plans.
The supplementary leverage ratio is a rule that makes large US banks keep extra money on hand to protect against losses.
The US banking industry is hopeful that regulators will soon change how much money banks must set aside for typically safe investments, especially after the recent problems in Treasury markets last month.
Changing the SLR could reduce the amount of cash banks must keep in reserve. This would free up money for more lending or other activities and might encourage banks to play a bigger role in Treasury markets.
The naira gained at the official market
The naira grew stronger in the official foreign exchange market on Wednesday. This happened just one day after the Central Bank of Nigeria (CBN) introduced a new banking identification system for Nigerians living abroad.
After trading yesterday, the naira gained N3.33 against the dollar. The official exchange rate was N1,596.70 to $1, which is 0.2 per cent better than Tuesday’s rate of N1,600.03 at the Nigerian Foreign Exchange Market (NFEM), according to CBN data.
In the unofficial parallel market (also called the black market), the naira lost some value. The dollar traded at N1,627 on Wednesday, which is N2 weaker than Tuesday’s rate of N1,625 per dollar.
On Tuesday, the CBN worked with the Nigeria Inter-Bank Settlement System (NIBSS) to officially launch the Non-Resident Diaspora Bank Verification Number (NRBVN). This new program aims to strengthen financial connections between Nigeria and Nigerians living abroad, while also increasing foreign currency flowing into the country.
