The Federal Government (FG) and the Nigerian National Petroleum Company Limited (NNPCL) are working on a plan to settle a fuel subsidy debt of ₦7.74 trillion within 210 days.
This debt, which accumulated as exchange rate differentials, covers the cost of keeping petrol prices stable in the market while the NNPCL was buying at higher rates between June 2023 and September 2024.
How Did the Debt Happen?
Even after President Bola Tinubu announced the end of fuel subsidies on May 29, 2023, the government continued supporting fuel prices by covering the difference between the market rate and what NNPCL paid for imports.
The debt was officially documented in a Federation Account Allocation Committee (FAAC) report from February 2025, which showed that the total exchange rate differential was ₦10.49 trillion, but ₦2.76 trillion had been recovered between November 2023 and September 2024, reducing the outstanding amount to ₦7.74 trillion.
Breakdown of the Rising Debt
The report shows how the debt grew month by month:
- June 2023: ₦1.4tn
- July 2023: ₦1.48tn
- December 2023: ₦2.94tn
- June 2024: ₦6.97tn
- September 2024: ₦7.74tn
This amount represents 14.07% of the 2025 national budget of ₦54.99 trillion.
Why Is NNPCL Asking for a Refund?
Experts, including Professor Wumi Iledare, question why NNPCL is demanding a refund from the government when it already earns revenue in US dollars by selling crude oil on behalf of Nigeria.
He explained that the NNPCL collects taxes and royalties from international oil companies (IOCs) and should be remitting these earnings to the government.
“It is hard to understand why the FG has to return money to NNPCL when the company already sells crude oil in dollars on behalf of the government,” he said.
Revenue Concerns and Calls for Transparency
FAAC members, including Ogun State Accountant-General, Tunde Aregbesola, have raised concerns over inconsistent revenue reporting by NNPCL.
Aregbesola noted that NNPCL’s financial reports showed outstanding receivables of ₦10.8 trillion, but there were concerns that the figures were still being reconciled.
FAAC officials are pushing for greater transparency to ensure that Nigeria’s oil revenue is properly accounted for and the subsidy debt is settled as planned.