Development economist and ECOWAS consultant, Prof. Ken Ife, has raised alarm over the Nigerian National Petroleum Company’s (NNPC) handling of crude oil proceeds and fuel subsidy savings, alleging that only half of the funds expected from subsidy reforms have reached President Bola Ahmed Tinubu’s administration.
Speaking during a broadcast interview on the Daily Business Channel on July 25, 2025, Prof. Ife criticized what he described as entrenched inefficiencies and lack of transparency within the operations of NNPC, warning that the company’s financial practices are undermining national economic recovery efforts.
“Only about 50% of the fuel subsidy savings have been made available to the Tinubu administration,” Prof. Ife said. “The rest is trapped within the NNPC, just as the World Bank has also pointed out.”
NNPC’s Crude Swap Deals Under Fire
According to Prof. Ife, NNPC unilaterally halted its monthly remittance of $3 billion in crude oil proceeds to the Central Bank of Nigeria (CBN) and instead engaged in a direct crude-for-PMS swap arrangement, which he argued is unfavorable to the country.
“What kind of business model is that? You export crude and receive only one refined product in return—Premium Motor Spirit (PMS)—and then turn around to ask the federal government to pay you ₦500 billion?” he queried.
He described this practice as economically irrational, emphasizing that the country was left in a financial chokehold until the Tinubu administration moved to suspend such arrangements.
Structural Legacy and Financial Constraints
Despite the policy reversal, Prof. Ife said that the damage had already been done. He explained that the subsidy savings expected to boost the federal purse were partially withheld by NNPC, leaving the administration financially constrained.
“What Tinubu inherited is a dysfunctional structure. Even after the subsidy removal, only half of the expected funds have reached the government. The rest is still caught up in NNPC’s inefficiencies,” he said.
The economist noted that much of the available funds had to be distributed to state governments, reducing the fiscal space available to the federal government for national development.
Regulatory Failures and Unanswered Questions
Prof. Ife also took aim at newly established regulatory institutions in the oil and gas sector, particularly those responsible for midstream and downstream operations. He criticized them for failing to carry out a basic yet critical task—verifying Nigeria’s actual fuel consumption.
“We still don’t know how much fuel we consume as a country. Without that data, how can we talk about reform?” he asked.
A Call for Transparency and Reform
The economist’s remarks have sparked fresh conversations around the effectiveness of subsidy reforms, the accountability of state-owned enterprises, and the urgent need for a comprehensive audit of NNPC’s operations.
As Nigeria continues to battle inflation, high fuel costs, and dwindling revenue, Prof. Ife’s revelations highlight the importance of institutional reform and financial transparency in achieving the goals of economic stability and long-term development.
This report is part of an ongoing series examining the impact of fuel subsidy reforms, state oil company accountability, and Nigeria’s economic transformation agenda.
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