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Federal Government’s Fuel Subsidy Debt To NNPCL Stands At $9.74 Billion

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3 years ago

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Federal Government’s Fuel Subsidy Debt To NNPCL Stands At $9.74 Billion....KINDLY READ THE FULL STORY HERE▶

Despite the Nigeria Extractive Industries Transparency Initiative (NEITI) asserting that the former Nigeria National Petroleum Corporation (NNPC) failed to remit $1.9 billion to the Federation Account in 2021 before its transition into a commercial entity, the federal government actually owes the national oil company the largest debt, amounting to approximately N4.1 trillion ($9.74 billion) for outstanding subsidy payments.

NEITI’s 2021 oil and gas report, revealed in Abuja last Monday, disclosed that the former NNPC did not remit $1.9 billion to the Federation Account Allocation Committee (FAAC) prior to its transformation. The transition occurred on July 19, 2022, when NNPC became NNPC Limited, operating as a commercial entity under the regulation of the Companies and Allied Matters Act (CAMA). This move ended its reliance on government funding.

Subsequently, on May 29, President Bola Tinubu removed the subsidy on petrol due to the government’s inability to bear the substantial cost.

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Before the subsidy removal, NNPC Limited had been the exclusive importer of petrol in Nigeria, incurring a monthly expenditure of approximately N400 billion on behalf of the federation through a scheme known as under-recovery. Under-recovery represents the deficit arising from the sale of premium motor spirit (PMS), commonly known as petrol, at a lower price than the market rate.

Between January 2023 and May 2023, the total under-recovery for petrol amounted to N1.828 trillion, marking a 55 percent increase from the N1.27 trillion recorded during the corresponding period in 2022.

Sources close to the Presidency revealed that while NNPC Limited received several letters from FAAC requesting payment of the approximately N2.8 trillion owed by the former NNPC to the federation account, the company refused to make any payments until the N4.1 trillion debt owed to it by the Federal Government was reconciled.

The sources stated, “The federation owes NNPC almost 4.1 trillion, and NNPC owes about N2.8 trillion to the federal government, so they should actually give it a cheque for the debt of N1.3 trillion they owe NNPC Limited.

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President Tinubu has established an inter-agency committee to address the ongoing dispute between NNPC Limited and FAAC over the past few years. The Presidency clarified that certain vested interests had presented inaccurate information to the new President, leading the national oil company to request a comprehensive investigation.

The committee, which began its work in June at the Ministry of Finance, is tasked with reconciling the controversies surrounding the N4.1 trillion debt owed to NNPC Limited by the Federal Government and the alleged N2.8 trillion that NNPC Limited failed to remit to the federation account.

Apart from the Ministry of Finance and NNPC Limited, other members of the debt reconciliation committee include the Nigerian Upstream Regulatory Commission (NUPRC), Federal Inland Revenue Service (FIRS), Office of the Accountant General of the Federation (OAGF), and FAAC Post-Mortem Sub-Committee.

The establishment of this committee was prompted by a memo dated June 13, 2023, from the Group Chief Executive Officer (GECO) of NNPCL, Mallam Mele Kyari, requesting President Tinubu’s intervention to address the allegations and counter-allegations between FAAC and NNPC Limited regarding debt status and remittances. A preliminary report from the committee has been submitted to President Tinubu.

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Economy

PETROL PRICE PARADOX: Why You Are Still Paying N1,200+ Despite Global Crude Crash.

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3 months ago

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June 25, 2026

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Despite a significant drop in global crude oil prices—with Brent falling to $73.14 and WTI to $69.85—petrol prices in Nigeria remain stubbornly high. While global markets have stabilized following the US-Iran conflict, domestic pump prices have barely budged, hovering between ₦1,200 and ₦1,300 per litre.....KINDLY READ THE FULL STORY HERE▶

Although industry insiders argue that ex-depot prices should be closer to ₦700, experts warn that a direct price drop is unlikely. Dr. Ayodele Oni, an oil and gas analyst, explains that in a deregulated market, the naira’s exchange rate is just as critical as the price of crude. He emphasizes that while falling crude prices help, the cost of petrol will only truly stabilize if the naira remains strong, as refined product imports are dollar-denominated. Consequently, relief for the average Nigerian may remain elusive unless both crude prices and the currency improve simultaneously.

Option 2: Accessible and Direct (Best for blogs or general reading)

Global oil prices are nearing pre-conflict levels, but Nigerians aren’t seeing the expected relief at the pump. Even though international oil benchmarks have dropped significantly since the US-Iran tensions cooled, local fuel prices remain stuck at ₦1,200 to ₦1,300 per litre.

Many marketers believe pump prices should be much lower, suggesting a price point closer to ₦700 per litre given current market conditions. However, analysts caution that it isn’t that simple. Because Nigeria’s fuel market is deregulated and reliant on imported refined products, the value of the naira is a major factor. Essentially, even if the price of crude oil falls, the cost of petrol will stay high as long as the dollar remains expensive against the naira. For now, experts believe that significant price relief depends as much on currency stability as it does on global oil trends.

Key Takeaways (Bullet Points)

  • The Disconnect: Global oil prices have returned to pre-conflict levels, yet domestic petrol prices remain high (₦1,200–₦1,300 per litre).

  • The Expectation: Marketers and the public believe current crude prices warrant a drop to around ₦700 per litre at the depot level.

  • The Complication: Experts note that the deregulation of the sector means the naira-to-dollar exchange rate is now a more powerful driver of pump prices than global crude costs alone.

  • The Outlook: Relief for consumers is unlikely to happen based on oil prices alone; it requires a combination of lower crude costs and a more stable naira.

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Economy

UNBEARABLE BURDEN: Nigerians Groan As Cooking Gas Hits Unprecedented ₦2,000 Per Kilogram.

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3 months ago

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June 1, 2026

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Despite a significant shift toward domestic production and a drop in imports, the price of Liquefied Petroleum Gas (LPG) has surged to ₦2,000 per kilogram in various parts of Nigeria. Data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) indicates that local facilities—including the Dangote Petroleum Refinery—have become the primary suppliers of LPG between April 2025 and April 2026, with daily domestic supply reaching 4,500 tonnes by April 2026. Conversely, imports have plummeted, falling from 1,600 tonnes per day in November 2025 to just 200 tonnes per day by March 2026.....KINDLY READ THE FULL STORY HERE▶

Market Challenges and Consumer Hardship

Even with consistent local output, consumers are facing prohibitive costs and localized shortages, leading many households to abandon gas in favor of charcoal and firewood. Key issues contributing to the crisis include:

  • Supply Chain Barriers: Marketers report that sourcing the product has become increasingly difficult, and they are now paying between ₦25.2 million and ₦26.2 million for 20 metric tonnes of LPG.

  • Economic Impact: The Nigerian Association of Liquefied Petroleum Gas Marketers (NALPGAM) stated that these high costs are causing severe hardship for families, food vendors, and small businesses.

  • Policy Setbacks: Stakeholders warn that these trends threaten to reverse years of progress in promoting clean energy adoption and may lead to increased environmental damage.

Infrastructure Progress

While market prices remain high, the Nigerian Gas Infrastructure Company reports that several critical projects designed to improve gas transportation are nearing completion. As of the latest data:

  • The Ajaokuta-Kaduna-Kano (AKK) Gas Pipeline Project is 93.40% complete.

  • The OB3 River Niger Crossing stands at 93.88% completion.

  • The ELPS Midline Compressor Project has reached 94.45% completion.

  • The Odidi-Warri Expansion Project is 70.28% complete, while the Escravos-Odidi project is in its early stages at 17.49%.

Despite this infrastructure progress, industry experts emphasize that addressing distribution bottlenecks remains essential, as increased domestic production alone has so far failed to lower retail prices for the average Nigerian.

Is there a specific aspect of this situation—such as the infrastructure projects or the marketers’ stance—that you would like to explore further?

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Economy

REVOLUTIONIZING THE SKIES: How Nigeria’s New $7 Billion AfDB Deal Will Transform Air Travel Forever!.

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3 months ago

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May 29, 2026

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Nigeria has officially signed a Letter of Intent with the African Development Bank (AfDB) to advance aviation development across the continent. Minister of Aviation and Aerospace Development, Festus Keyamo, formalized the agreement during a dialogue in Brazzaville, Congo, where he served as the African Champion of the AfDB’s Integrated Aviation Transformation Programme.....KINDLY READ THE FULL STORY HERE▶

During the session, Minister Keyamo showcased President Bola Tinubu’s “Renewed Hope Agenda,” emphasizing the need for capital to support key infrastructure and the newly established Nigeria Aircraft Leasing Company. To attract this investment, the Minister highlighted Nigeria’s recent regulatory reforms, including the domestication of the Cape Town Convention and updates to insurance frameworks. In response, AfDB President Dr. Sidi Ould Tah pledged the bank’s support for the programme, signaling a shared commitment to strengthening aviation finance and infrastructure throughout Africa.

Nigeria Moves to Boost Aviation Sector Through AfDB Partnership

Nigeria has taken a major step toward modernizing its aviation industry by signing a Letter of Intent with the African Development Bank (AfDB). Aviation Minister Festus Keyamo, representing the country in Brazzaville, Congo, utilized the platform to present Nigeria’s aviation roadmap under President Tinubu’s “Renewed Hope Agenda.”

A core focus of the discussion was the Nigeria Aircraft Leasing Company, which is expected to improve aircraft financing for local operators. Minister Keyamo assured stakeholders that Nigeria is ready for increased investment, citing significant reforms such as the domestication of the Cape Town Convention and modernized insurance policies. The AfDB has signaled strong support for these initiatives, agreeing to collaborate on the Integrated Aviation Transformation Programme to drive sustainable growth for Nigeria and the wider African aviation market.

Option 3: Short & Punchy (Best for social media or newsletters)

Nigeria is accelerating its aviation growth through a new partnership with the African Development Bank (AfDB). Aviation Minister Festus Keyamo recently signed a Letter of Intent in Brazzaville to unlock funding for the sector, specifically targeting the new Nigeria Aircraft Leasing Company. By implementing key reforms—like the domestication of the Cape Town Convention—Nigeria is positioning itself as a hub for aviation investment. The AfDB has officially pledged its support, marking a key milestone in efforts to modernize air travel infrastructure across the African continent

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