NNPC Awaits Over N7trn Petrol Subsidy Payment From Tinubu Government
- The NNPC Limited has revealed that it is expecting payment from the federal government for petrol subsidy
- The payment is for debt owed for petrol imports initiated between June 2023 and September 2024
- The amount owed to the NNPC limited has increased due to the rise in the naira-to-dollar exchange rate
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Nigerian National Petroleum Company Limited (NNPCL) has disclosed that the Federal Government's debt in exchange rate differentials for Premium Motor Spirit (petrol) imports surged to N7.74 trillion as at September 2024.
Source: Getty Images
The figures were disclosed during a presentation to the Federation Account Allocation Committee (FAAC) in Abuja.
The debt accrued from the government's commitment to maintaining a specific petrol price range despite higher import costs between June 2023 and September 2024.
This is despite President Bola Tinubu declaring during his inauguration in May 2023 that the petrol subsidy is gone.
However, a document has now shown that the government subsidised fuel imports by covering the gap between the projected cost and the actual expenses incurred by NNPCL for importing petroleum products.
This cost difference, which would typically be passed on to consumers through retail prices, is now what the national oil firm seeks to recover from the government.
Punch reports that the amount owed by the federal government increased due to the rising exchange rate from that period to date.
In the FAAC presentation, it was stated that efforts are underway to settle the N7.74 trillion subsidy debt within 210 days.
Here is an insight on the debt
The FAAC document showed that the petrol subsidy debt increased from N1.29 trillion in June 2023 to N7.74 trillion by September 2024, representing a significant 14.07% of the N54.99 trillion 2025 national budget.
A month-by-month breakdown indicated that the debt, with an outstanding balance of N1.29 trillion, increased to N1.402 trillion in June 2023, N1.48 trillion in July 2023, N1.535 trillion in August, N1.59 trillion in September, and N1.81 trillion in October 2023.
By November, these claims increased by N662.9 billion to N2.378 trillion, and by another N616.38 billion to N2.94 trillion in December 2023.
The document further indicated that the figure increased to N3.57 trillion in January 2024, N3.96 trillion in February, N4.68 trillion in March, N5.81 trillion in April, N6.47 trillion in May, and N6.97 trillion as of June 2024.
Petrol consumption drops
Legit.ng previously reported that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has revealed that Nigeria’s three functional refineries supply less than 50% of the country’s petrol consumption despite improved refining capacity.
The NMDPRA said the shortfall in petrol supply was being met by importing petroleum products.
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The chief executive of NMDPRA, Farouk Ahmed, disclosed that the country’s petrol consumption has fallen to 50 million litres daily, stressing that without the imports, Nigerians would still have fuel shortages.
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Source: Legit.ng
