This debt covers the cost of maintaining stable retail fuel prices despite higher import costs between June 2023 and September 2024. The details were revealed in a presentation by NNPCL to the Federation Account Allocation Committee (FAAC) during its February meeting in Abuja.
The FAAC document also disclosed that the government is working to settle the N7.74 trillion debt within 210 days. Earlier, in August 2024, NNPCL had demanded a N4.71 trillion refund from the government to cover outstanding debts for petrol imports between August 2023 and June 2024.
Exchange rate differentials refer to the income generated from fluctuations in currency values during foreign exchange transactions. For instance, if $1 equals N1,600 today and N1,500 tomorrow, the difference represents the exchange rate differential.
The government supported fuel imports by covering the gap between projected and actual import costs incurred by NNPCL. This cost, which would typically be passed on to consumers through higher retail prices, is now being claimed by NNPCL from the government.
A breakdown of the document shows that the total exchange rate differential due was N10.499 trillion, but N2.756 trillion was recovered between November 2023 and September 2024, leaving an outstanding balance of N7.74 trillion.
The debt increased monthly, starting at N1.29 trillion in June 2023 and rising to N7.74 trillion by September 2024. This amount represents 14.07% of the N54.99 trillion 2025 national budget.
Despite President Bola Tinubu’s declaration on May 29, 2023, that “subsidy is gone,” reports from the International Monetary Fund (IMF), the World Bank, and other sources suggest the government quietly reintroduced fuel subsidies. A proposed economic stabilization plan in June 2024 indicated that the government planned to spend N5.4 trillion on fuel subsidies.
Energy expert Wumi Iledare questioned why NNPCL is seeking reimbursement from the government, given that the company sells oil in foreign currency on the government’s behalf. He argued that NNPCL should pay royalties to the government like other oil companies.
Meanwhile, FAAC members have raised concerns about inconsistencies in NNPCL’s revenue reporting. Tunde Aregbesola, the Ogun State Accountant-General, noted a significant decline in revenue compared to November 2024 and questioned the accuracy of NNPCL’s figures, which are still under reconciliation.
FAAC Chairman Oluwatoyin Madein assured that the reconciliation process, handled by the Alignment Committee, is ongoing and will address all relevant issues.