Tinubu writes off trillions of NNPC debt, eases federation account burden

President Bola Tinubu has approved the cancellation of the majority of the Nigerian National Petroleum Company Limited’s (NNPC Ltd) debts to the Federation Account, wiping off about $1.42 billion and N5.57 trillion in a major fiscal cleanup.

The directive, detailed in a report by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), was presented at the November 2025 meeting of the Federation Account Allocation Committee (FAAC). The report confirmed that the presidential approval followed a thorough reconciliation of NNPC’s records with the Federation Account, covering liabilities up to December 31, 2024.

According to NUPRC, the debts previously reported stood at $1.48 billion and N6.33 trillion for PSC, DSDP, RA & MCA liftings and JV & PSC royalty receivables. Following the write-off, $1.42 billion (96%) of dollar-denominated debt and N5.57 trillion (88%) of naira obligations have been removed from the Federation’s books.

The cancellation resolves long-standing disputes over legacy obligations, although fresh debts accumulated in 2025 remain. NUPRC data show statutory obligations from January to October 2025 total $56.8 million and N1.02 trillion, with partial recovery of $55 million already made from the dollar component.

Despite the debt relief, the commission continues to face revenue challenges. November 2025 collections fell short of the target of N1.204 trillion, with only N660.04 billion recorded. Royalty receipts, the main source of upstream revenue, were also below projections, contributing to a cumulative revenue gap of N5.65 trillion for the year.

The move comes against the backdrop of ongoing disputes between NNPC and Periscope Consulting, the audit firm engaged by the Nigeria Governors’ Forum. Periscope claims under-remittance of $42.37 billion (N12.91 trillion) between 2011 and 2017, a claim rejected by NNPC, which insists all revenues were fully accounted for. FAAC has mandated joint reconciliation meetings to resolve the differences.

With the presidential directive implemented, legacy debts are cleared, easing pressure on the Federation Account, while the NUPRC continues to monitor current and future obligations from NNPC’s ongoing operations.