Devaluation: FG now owes NNPCL over N7.3trn fuel subsidy debt

The federal government has remained the biggest debtor to the Nigerian National Petroleum Company Limited (NNPCL) with about N7.3 trillion ($9.74bn) outstanding for subsidy payment. The new figure is arrived at when Daily Trust converted the dollar-denominated debt at the current exchange rate of N734 to a dollar. Recall that the management of the NNPC […]

The federal government has remained the biggest debtor to the Nigerian National Petroleum Company Limited (NNPCL) with about N7.3 trillion ($9.74bn) outstanding for subsidy payment.

The new figure is arrived at when Daily Trust converted the dollar-denominated debt at the current exchange rate of N734 to a dollar.

Recall that the management of the NNPC had in the past said: “The federation owes NNPC almost 4.1trn and NNPC owes about N2.8trn to the federal government, so they should actually give it a cheque for the debt of N1.3trn they owe NNPC Limited.”

Before the removal of the petrol subsidy by President Bola Tinubu on May 29, NNPCL had been the sole importer of petrol, spending about N400bn monthly on behalf of the federation through an arrangement known as under-recovery.

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From January 2023 to May 2023, petrol under-recovery totalled N1.828trn; which is 55 per cent higher than the N1.27trn paid in the corresponding period of 2022.

Daily Trust had reported that the NNPC Limited received several demand notices from the FAAC requesting payment of the about N2.8trn allegedly owed the federation account, but the NNPC said it could not pay any money to FAAC pending the reconciliation of the $9.74bn (N7.3trn) debt the federal government was owing it.

Already, President Tinubu has set up an inter-agency committee to resolve the lingering row between NNPC Limited and FAAC.

Besides, 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.

Daily Trust learnt that a preliminary report has been submitted by the committee to the president.

‘NNPCL did not withhold $55m from FAAC’

A source also said contrary to claims by FAAC,  the NNPC did not withhold the $55m Nigeria Liquified Natural Gas dividend that was alleged should have been paid into the nation’s coffers.

In a report, the FAAC post-mortem sub-committee was said to have alleged that the NLNG paid a dividend of $275m and that the state-owned company used $220m of the whole payout to pay off the nation’s obligation on subsidy.

It was further stated that the NNPC withheld $55m, or 20 per cent of what should have been paid into the nation’s coffers, which the committee deemed unlawful.

A senior management source at the NNPC said in the month of May,  the national oil company approached the federal government to provide the needed funds for the importation of petrol. The administration of former President Muhammadu Buhari gave approval that the sum of N400bn be given to NNPC as a loan to the federal government by the Central Bank of Nigeria.

The fund was used to defray some of the fuel subsidy debts owed oil marketers.

Daily Trust also learnt that in June this year, the amount needed to import petrol was $700m. The NNPC again approached the government for funding.

However, out of this $700m, only $275m which was sourced from the NLNG dividend account was made available to the NNPC Limited by the government.

The source said: “The entire $275m was paid by the NNPC to oil marketers to enable the national oil firm to reduce the level of its indebtedness.

The source said, “The amount requested by NNPC was $700m. The government provided $275m from NLNG dividend account. So, the NNPC got the money and that was what the company used to reduce the debt owed to marketers. No dollar was withheld by NNPC. So, anybody saying NNPC withheld $55m is telling a lie.”