President Bola Ahmed Tinubu has approved the cancellation of approximately $1.42 billion and ₦5.57 trillion in outstanding legacy debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, a move aimed at resolving long-standing financial disputes in the oil sector.
The decision, detailed in a document from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) presented at the November 2025 Federation Account Allocation Committee (FAAC) meeting, follows recommendations from the Stakeholder Alignment Committee set up to reconcile indebtedness between NNPC Ltd and the Federation.
“President Bola Ahmed Tinubu has approved the cancellation of a substantial portion of NNPC Ltd’s outstanding debts owed to the Federation Account, effectively wiping out approximately $1.42 billion in legacy obligations,” a Presidency statement posted on X read.
The cancelled debts cover liabilities up to December 31, 2024, including those from production sharing contracts (PSCs), domestic supply obligations, repayment agreements, modified carry arrangements, and joint venture/PSC royalty receivables. Corresponding accounting adjustments have already been made in the Federation Account.
However, obligations incurred from January to October 2025 remain outstanding and are being tracked for recovery. A separate dispute over an alleged $42.37 billion under-remittance from 2011–2017 persists, with NNPC rejecting the claims and asserting proper accounting.
The approval comes against the backdrop of persistent criticism of NNPC’s transparency. The latest Auditor-General’s report, submitted to the National Assembly in September 2025, highlighted violations including failure to deduct 1% stamp duty on ₦24.7 billion and $52.98 million in payments, resulting in unpaid taxes of ₦247 million and $529,863, among other irregularities from 2020–2021.
Critics have raised concerns over the lack of National Assembly debate or approval for the debt cancellation, arguing that such significant fiscal decisions involving public funds should undergo legislative scrutiny as required by law. Checks by journalists confirm no record of prior parliamentary discussion on the matter.
The Presidency described the write-off as part of reforms to address legacy issues and enhance revenue management in the energy sector. NNPC Ltd has not issued a separate statement as of press time.
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