President Bola Tinubu has approved the cancellation of a large portion of the debts owed by the Nigerian National Petroleum Company Limited (NNPC Ltd) to the Federation Account, wiping off about $1.42bn and ₦5.57tn after a reconciliation of records.
The approval, contained in a Nigerian Upstream Petroleum Regulatory Commission (NUPRC) report presented at the November Federation Account Allocation Committee (FAAC) meeting, relates to legacy obligations accumulated up to December 31, 2024. The write-off represents about 96 per cent of the dollar-denominated debt and 88 per cent of the naira obligations previously recorded.
Despite the clearance of these legacy balances, fresh debts incurred between January and October 2025 remain. Outstanding obligations still stand at about $1.8m and ₦1.02tn, with only part of the dollar component recovered so far.
The debt relief comes amid widening revenue shortfalls. In November 2025, the NUPRC recorded ₦660.04bn in revenue against a monthly target of ₦1.20tn, leaving a deficit of over ₦540bn, largely due to weak royalty collections.
Meanwhile, disputes over an alleged $42.37bn under-remittance of oil revenues between 2011 and 2017 remain unresolved, with regulators mandating a joint reconciliation between NNPC Ltd and the auditing firm involved.
While the debt write-off resolves long-standing legacy issues, concerns persist over declining revenues, transparency, and ongoing liabilities in Nigeria’s oil sector.
