Tinubu led administration has confirmed its plan to settle a fuel subsidy debt of N7.74trillion owed to the Nigerian National Petroleum Company Limited (NNPCL).
The debt, which accumulated as an exchange rate differential for the importation of Premium Motor Spirit (PMS), spans from June 2023 to September 2024, when the country fully implemented the deregulation of the downstream oil sector.
The figure was disclosed in a document presented by the NNPCL to the Federation Account Allocation Committee (FAAC) during its February meeting in Abuja, PUNCH reports.
The government has outlined a plan to clear the outstanding subsidy within 210 days, according to the document obtained by our correspondent.
The report revealed that the subsidy debt initially stood at N10.499 trillion, but N2.756 trillion was recovered between November 2023 and September 2024, bringing the balance to N7.74 trillion.
A month-by-month breakdown showed how the debt steadily increased: June 2023 – N1.402 trillion; July 2023 – N1.48 trillion; October 2023 – N1.81 trillion; March 2024 – N4.68 trillion; June 2024 – N6.97 trillion, and September 2024 – N7.74 trillion.
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The subsidy amount represents 14.07% of Nigeria’s N54.99 trillion 2025 national budget.
In August 2024, it was reported that the NNPCL requested a refund of N4.71 trillion from the government for petrol imports.
At the time, this was listed under “Exchange rate differential on PMS and other joint venture taxes.”
Exchange rate differentials occur when there is a change in the value of a currency over time, affecting the cost of transactions.
In this case, the government covered the difference between the official exchange rate and the actual cost incurred by NNPCL in importing petrol.
Despite Bola Tinubu’s declaration in May 2023 that the fuel subsidy had been removed, reports from the International Monetary Fund (IMF) and World Bank suggest that the subsidy was quietly reintroduced through price stabilization measures.
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