FG owes NNPC N7.3 trillion in fuel subsidy debt following naira depreciation

The Nigerian government is the biggest debtor to the Nigerian National Petroleum Company Limited (NNPCL), with over N7 trillion in subsidy debts.

The amount is due to the naira devaluation, which officially exchanges at N734 per dollar.

NNPC management had revealed that the Nigerian government owed it about N4.1 trillion. At the same time, it failed to remit about N2.8 trillion to the federation account, leaving a balance of N1.3 trillion owed to the national oil firm.

NNPC spent N400 billion monthly on petrol imports in 2023

Before subsidy removal, NNPC was the only petrol importer and spent about N400 billion monthly importing the product on the country's behalf under an under-recovery arrangement.

Between January 2023 and May 2023, petrol under-recovery amounted to N1.828 trillion, 55% higher than the N1.27 trillion paid in the previous year.

According to Daily Trust reporting, NNPC received demand notices from the Federation Accounts Allocation Committee (FACC) asking for N2.8 trillion in payment for debts owed to the Nigerian government.

However, the NNPC said it could only pay FAAC once the federal government's reconciliation of the N7.3 trillion owed is finalised.

President Bola Tinubu had set up an inter-agency committee to fix the protracted row between FAAC and NNPC.

The Committee includes the Ministry of Finance, NNPC, the Nigeria Upstream Petroleum Regulatory Commission (NUPRC), the Federal Inland Revenue Service (FIRS), the Accountant General's Office, and the FAAC Post-Mortem Sub-Committee.

Reports say the President has since received the Committee's initial report.