The Federal Government of Nigeria owes the Nigerian National Petroleum Company Limited (NNPCL) N7.74 trillion due to exchange rate differences linked to the importation of Premium Motor Spirit (PMS), also known as petrol. This debt accumulated between June 2023 and September 2024, when the government was still managing fuel prices despite deregulating the downstream oil sector.
The details were revealed in a presentation by NNPCL to the Federation Account Allocation Committee (FAAC) during its February meeting in Abuja. The report notes that the government is working on a plan to settle the debt within 210 days.
In August 2024, NNPCL had previously requested a refund of N4.71 trillion from the government to cover unpaid costs related to petrol imports. At the time, this claim was categorized as “Exchange rate differential on PMS and other joint venture taxes.” Exchange rate differentials occur when there is a change in the value of the naira against the dollar over time, affecting the cost of fuel imports.
The report further explains that between July and September 2024, the exchange rate differential was calculated based on the Nigerian Autonomous Foreign Exchange Market (NAFEM) rate. However, it also states that actual costs may change depending on the exchange rate at the time of settlement.
A breakdown of the debt shows that while the total exchange rate differential was originally N10.499 trillion, about N2.756 trillion was recovered between November 2023 and September 2024, bringing the outstanding balance down to N7.74 trillion. The report also notes that payments are currently ongoing and will continue over the next 210 days.
The figures indicate a steady increase in the debt over time. In June 2023, the outstanding balance was N1.402 trillion, rising to N1.81 trillion by October 2023. By January 2024, it had grown to N3.57 trillion, reaching N6.97 trillion in June 2024 and finally N7.74 trillion in September 2024. This amount represents about 14.07% of Nigeria’s N54.99 trillion 2025 national budget.
The issue of fuel subsidies has remained a major topic of debate. On May 29, 2023, during his inauguration, President Bola Tinubu declared, “subsidy is gone,” signaling the end of government intervention in fuel pricing. However, reports from international organizations, including the International Monetary Fund (IMF) and the World Bank, have suggested that subsidies were reintroduced indirectly.
Meanwhile, energy experts have questioned why NNPCL is asking for compensation from the government when it generates revenue in foreign currency by selling crude oil on the country’s behalf. Some argue that NNPCL, like other oil companies, should remit its earnings to the government rather than claim additional payments.
Additionally, concerns have been raised by FAAC members over inconsistencies in revenue reports from NNPCL. Ogun State’s Accountant-General, Tunde Aregbesola, pointed out discrepancies in the amount remitted, noting that receivables from NNPCL stood at about N10.8 trillion. He also questioned whether the figures were still being reconciled.
In response, FAAC Chairperson Oluwatoyin Madein stated that the reconciliation process was ongoing and being handled by the Alignment Committee. She noted that efforts were being made to ensure all relevant financial issues were properly addressed.
