The Nigerian National Petroleum Company Limited (NNPCL) has written off a total of N4.01 trillion in subsidy arrears and other debts owed to the Federal Government, following a detailed reconciliation of accounts between the two entities.
Documents submitted by NNPCL to the Federal Allocation Accounts Committee (FAAC) in October and November 2025 revealed that the company’s payables to the Federation, previously listed at N4.72 trillion, were reduced to N706.32 billion after the review, effectively wiping out the bulk of the outstanding obligations.
The write-off aligns with a presidential directive approving the cancellation of a large portion of the debts, including $1.42 billion and N5.57 trillion previously recorded. The decision was part of ongoing efforts to clarify legacy subsidy obligations, improve transparency in oil revenue reporting, and strengthen the company’s financial position for potential market and commercial activities.
According to the FAAC submissions, the reduction came after reconciling discrepancies between earlier reports from the Nigerian Upstream Petroleum Regulatory Commission and NNPCL.
The variance primarily arose from the treatment of certain legacy obligations, including royalty, tax, and 40% Production Sharing Contract profits due up to May 2023, which had already been addressed under the Presidential Approved Stakeholder Alignment Committee framework.
While the legacy debts have largely been cleared, fresh liabilities for 2025 are still being tracked. Records show that statutory obligations from January to October 2025 amount to $56.8 million and N1.02 trillion, though part of the dollar component has already been collected.
Experts have welcomed the reconciliation as a step toward financial clarity but note concerns about the impact of such large cancellations on federal revenue and the need for continued coordination between NNPCL, the regulator, and the Office of the Accountant-General of the Federation.
The write-off comes against the backdrop of Nigeria’s long-running fuel subsidy regime, which had seen NNPCL carry substantial costs before the removal of subsidies in mid-2023.
