NNPCL Cancels N4.01 Trillion Subsidy Debt After FAAC Reconciliation
- NNPCL cancelled N4.01 trillion in subsidy arrears and other debts owed by the Federal Government
- The write-off followed a reconciliation of accounts approved at FAAC meetings in October and November
- While legacy debts were cleared, fresh liabilities from 2025 operations remain outstanding
Oluwatobi Odeyinka is a business editor at Legit.ng, covering energy, the money market, technology and macroeconomic trends in Nigeria.
The Nigerian National Petroleum Company Limited (NNPCL) has written off subsidy arrears and other debts owed by the federal government amounting to N4.01 trillion, following a reconciliation of accounts between both parties.
The development was contained in official documents submitted by NNPCL to the Federation Account Allocation Committee (FAAC) during its October and November 2025 meetings, according to an analysis of the records.
Source: Twitter
How the debt cancellation happened
As reported by PIUNCH, FAAC documents showed that NNPCL’s outstanding payables to the Federation Account dropped sharply after the reconciliation exercise.
As of the October 2025 FAAC meeting, NNPCL’s liabilities stood at N4.72 trillion. By the November 2025 meeting, this figure had reduced to N706.32 billion, indicating that about N4.01 trillion was cancelled.
Presidential approval and reconciliation process
The debt write-off followed presidential approval to cancel a substantial portion of legacy obligations after a reconciliation of accounts between NNPCL and the federal government.
According to the documents, most of the balances previously listed as outstanding for Production Sharing Contracts (PSC), Direct Sale Direct Purchase (DSDP), Royalty and JV liftings were approved for removal from the Federation’s books.
The FAAC submission explained discrepancies between figures earlier quoted by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and those presented by NNPCL.
It noted that some legacy royalty, tax and PSC profit obligations up to May 2023 had already been captured under the Presidential Approved Stakeholder Alignment Committee framework.
In addition, N2.03 trillion in royalty and tax obligations covering June to December 2023 was excluded from NNPCL’s liabilities and reassigned to the Office of the Accountant-General of the Federation (OAGF).
Subsidy legacy and ongoing concerns
The debt cancellation reflects an end to Nigeria’s former fuel subsidy regime, under which NNPCL carried trillions of naira in under-recoveries as the sole petrol importer before subsidies were removed in mid-2023.
While the write-off resolves long-standing disputes over legacy debts, experts have raised concerns about its impact on federal revenues and the clarity of inter-agency accounting.
Despite the cancellation, FAAC records show that new statutory obligations accumulated in 2025 remain outstanding.
Liabilities incurred from January to October 2025 were put at $56.8 million and N1.02 trillion, though part of the dollar component has already been recovered.
The NUPRC confirmed that the approved accounting entries have been implemented in the Federation Account.
Source: Twitter
FG cancels NNPCL debts
Legit.ng earlier reported that the federal government cancelled $1.42 billion and N5.57 trillion debts of NNPCL, aiming for a financial reset.
Reconciliation ends long-standing disputes over historical claims between NNPCL and the federal government.
However, a shortfall in upstream revenue collections reveals ongoing challenges despite significant debt write-off.
Source: Legit.ng
