The Nigerian National Petroleum Company Limited (NNPC Ltd) has written off subsidy arrears and other obligations owed by the Federal Government amounting to N4.01 trillion, following a reconciliation of accounts between both parties.
An examination of documents submitted by NNPC Ltd to the Federation Account Allocation Committee (FAAC) at its October and November 2025 meetings shows that the debt cancellation was part of a broader agreement to clean up long-standing liabilities on the Federation’s books.
FAAC records indicate that NNPC Ltd’s outstanding payables to the Federation stood at about N4.72 trillion at the October 2025 meeting. By the November meeting, however, the figure had fallen sharply to roughly N706.32 billion, reflecting a reduction of N4.01 trillion.
The documents stated that “NNPC Ltd payables to the Federation amounted to N4.72 trillion as at October 2025 FAAC, while the outstanding balance stood at N706.32 billion as at November 2025 FAAC,” confirming the scale of the write-off.
The development follows earlier disclosures that President Bola Tinubu approved the cancellation of significant legacy debts involving the national oil company, including about $1.42 billion and N5.57 trillion, after an extensive reconciliation of records between NNPC Ltd and the Federal Government.
Details contained in the report titled “Report of October 2025 Revenue Collection Presented at the Federation Account Allocation Committee Meeting Held on 18th November 2025” show that the debts previously reported included obligations related to Production Sharing Contracts, Direct Sale Direct Purchase arrangements, lifting operations, and royalty receivables.
According to the documents, differences between figures earlier presented by the Nigerian Upstream Petroleum Regulatory Commission and those provided by NNPC Ltd were due to the treatment of legacy liabilities. Some obligations relating to royalty, tax, and Production Sharing Contract profits up to May 2023 had already been addressed under a Presidential-approved stakeholder alignment framework.
In addition, the records noted that about N2.03 trillion covering royalty and tax obligations for the period between June and December 2023 was excluded from NNPC Ltd’s liabilities and would instead be handled by the Office of the Accountant-General of the Federation.
The write-off is expected to ease pressure on the Federation Account and bring greater clarity to the financial relationship between the Federal Government and the national oil company, while outstanding balances will continue to be monitored through FAAC processes.
