President Bola Tinubu has approved the cancellation of a substantial portion of the debts owed by the Nigerian National Petroleum Company Limited, (NNPCL) to the Federation Account, wiping off about $1.42billion and N5.57trillion after a reconciliation of records between both parties.
This is contained in a document prepared by the Nigerian Upstream Petroleum Regulatory Commission, (NUPRC), and presented at the November meeting of the Federation Account Allocation Committee, (FAAC).
The report is titled: ‘Report of October 2025 Revenue Collection Presented at the Federation Account Allocation Committee Meeting Held on 18th November 2025’.
In the section headed: ‘Recovery from NNPC Ltd Outstanding Obligations’, the Commission said the debts earlier reported at the October 2025 FAAC meeting stood at “$1,480,610,652.58 and ₦6,332,884,316,237.13 for PSC, DSDP, RA & MCA Liftings and JV & PSC Royalty Receivables respectively”.
It disclosed that the Presidency had now approved that most of those balances be removed from the Federation’s books.
The document stated, “However, the commission recently received a Presidential Approval to nil off the outstanding obligations of NNPC Ltd as at 31st December 2024 as submitted by the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPCL and the Federation.”
Providing a breakdown of the affected balances, the NUPRC added that: “Consequently, out of $1,480,610,652.58 and ₦6,332,884,316,237.13, the affected outstanding obligations that have been nil off are $1,421,727,723.00 ₦5,573,895,769,388.45. The Commission has passed the appropriate accounting entries as approved”.
An analysis of the figures shows that the presidential directive wiped out about 96% of the dollar-denominated debt and about 88% of the naira-denominated obligations previously reported as outstanding.
The document indicates that the approval followed the recommendations of the Stakeholder Alignment Committee on the Reconciliation of Indebtedness between NNPCL and the Federation, which reviewed the company’s royalty and lifting-related liabilities up to December 31, 2024.
Despite the cancellation of the legacy balances, fresh debts built up in 2025 remain. In a separate section titled: ‘NNPC Ltd Outstanding Obligations’, the regulator disclosed that statutory obligations arising between January and October 2025 still stood at ‘$56,808,752.32 and ₦1,021,550,672,578.87 for PSC & MCA Liftings and JV Royalty Receivables respectively’.
The Commission added that part of the dollar component was recovered in the month under review, stating: “However, the Commission received $55,003,997.00 in the month under review from the outstanding, leaving a balance of $1,804,755.32 and ₦1,021,550,672,578.87. The amount of $55,003,997.00 received is part of the total collection reported above for sharing by the Federation this month.”
The NUPRC confirmed that it had already implemented the directive in the Federation Account, noting that “the Commission has passed the appropriate accounting entries as approved”.
The approval effectively resolves long-running disputes over NNPCL’s legacy indebtedness to the Federation, while current liabilities from ongoing operations continue to be tracked for future recovery.
However, it was gathered that tthe debt cancellation comes at a time when the Commission is struggling to meet its revenue projections for the year. Data from the NUPRC document showed that against a 2025 approved monthly revenue target of ₦1.204trillion, the Commission recorded N660.04bn as actual collection for November 2025, leaving a shortfall of ₦544.76bn for the month.
Cumulatively, as of November 30, 2025, the NUPRC’s total approved revenue stood at ₦13.25trillion, while actual cumulative collections were N7.60trillion, representing a revenue gap of ₦5.65trillion. For royalties alone, cumulative approved collections stood at ₦12.59trillion against ₦6.96trillion actually received, leaving a shortfall of ₦5.63trillion.
The document further showed a drop in revenue collections compared to the previous month. While ₦873.10bn was collected in October 2025, the figure declined to ₦660.04bn in November.
The World Bank earlier accused NNPCL of failing to fully remit oil revenues to the Federation Account, thereby undermining fiscal transparency and macro-economic stability.
The bank noted that while the company was corporatised in 2021 to operate as a commercial entity, it still retains monopolistic control over crude oil sales and foreign exchange inflows, leading to persistent gaps between reported earnings and actual remittances.
The institution said the state-owned company has only been remitting 50% of revenue gains from the removal of the Premium Motor Spirit subsidy to the Federation Account.
It said out of the ₦1.1trillion revenue from crude sales and other income in 2024, the NNPCL only remitted ₦600bn, leaving a deficit of ₦500bn unaccounted for. “Despite the subsidy being fully removed in October 2024, NNPC Ltd started transferring the revenue gains to the Federation only in January 2025. Since then, it has been remitting only 50% of these gains, using the rest to offset past arrears”, the World Bank stated.
Since assuming office, the NNPC Ltd Group Chief Executive Officer, Bayo Ojulari, has consistently pledged to entrench transparency, efficiency, and accountability in the company’s operations.
He has repeatedly assured Nigerians and the global investment community that the company’s books would be transparent and that its dealings with the Federation Account would be fully compliant with fiscal rules.
