CHRICED slams FG over $1.42b, N5.57tr NNPC debt waiver
Independent findings have shown that the Nigerian National Petroleum Company Limited (NNPCL) did not receive a wholesale write-off of royalty obligations owed to the Federation Account; rather, only a limited waiver of interest and penalties arising from delayed payments was approved.
However, the Resource Centre for Human Rights and Civic Education (CHRICED) has faulted the Federal Government’s decision to waive about $1.42 billion and N5.57 trillion debt owed by NNPCL to the Federation Account.
Findings by The Guardian showed that NNPCL’s core royalty liabilities were never forgiven. Instead, the waiver addressed accumulated interest and penalties triggered by late remittances at a time the company’s cash flow was severely constrained by petrol price controls.
According to The Guardian sources, the delay in royalty payments was largely linked to the cost of petrol under-recovery, which tied down NNPCL’s funds for the better part of 2023 and 2024.
During that period, the company absorbed the gap between the regulated pump price of petrol and its actual landing cost, limiting its ability to meet statutory obligations promptly.
“No royalty was written off. What was waived were interest and penalties resulting from late payment,” one source said, adding that last July, NNPC has consistently remitted royalties as they fall due.
The clarification follows reports that President Bola Tinubu approved the cancellation of significant debts owed by NNPCL to the Federation Account, amounting to about $1.42 billion and N5.57 trillion.
The approval was contained in a document prepared by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and presented at the November meeting of the Federation Account Allocation Committee (FAAC).
NUPRC’s ‘Report of October 2025 Revenue Collection Presented at the Federation Account Allocation Committee Meeting Held on 18th November 2025’ indicated that outstanding obligations previously reported to FAAC stood at $1.48 billion and N6.33 trillion. These liabilities were linked to production sharing contracts, direct sale-direct purchase arrangements, joint venture operations and royalty receivables.
The document stated that the Presidency approved the removal of most of these balances from the Federation’s books following a reconciliation exercise conducted by a Stakeholder Alignment Committee. As a result, obligations amounting to $1.42 billion and N5.57 trillion were “nil off” as of December 31, 2024, with NUPRC confirming that appropriate accounting entries had been passed.
While the FAAC document reflects a reconciliation-based removal of balances, NNPC’s position suggests that the principal royalties had already been settled or were in the process of being paid, leaving only penalty-related amounts subject to waiver.
CHRICED described the waiver as fiscally reckless, opaque, and unconstitutional. It said the debt waiver, which covers $1.42 billion and N5.57 trillion in outstanding obligations, was approved by the Federal Government without public scrutiny, legislative endorsement or an independent audit.
The development, it said, undermines transparency and accountability in the oil and gas sector. Executive Director of CHRICED, Ibrahim Zikirullahi, in a statement in Abuja, warned that the decision set a dangerous precedent, particularly at a time Nigeria was grappling with severe revenue shortfalls and mounting fiscal pressure on sub-national governments.
According to him, the waiver effectively cancels about 96 per cent of NNPC’s dollar-denominated debts and 88 per cent of its naira obligations, depriving the Federation Account of funds meant for sharing among the federal, state and local governments.
Zikirullahi noted that the move comes amid alarming revenue underperformance by NUPRC, which it said was cumulatively behind its 2025 revenue target by over N5.65 trillion.
