The Federal Accounts Allocation Committee has revealed that the Nigerian National Petroleum Company (NNPC) Limited currently owes the Federal Government a staggering N6.57trn as of May 2025.
FAAC said the bulk of the debt, about N3.89trn, comprised unpaid royalties due to the Nigerian Upstream Petroleum Regulatory Commission.
According to the committee, the NNPC is yet to remit another N2.52trn outstanding tax liability payable to the Federal Inland Revenue Service.
The report, obtained at the weekend, raises alarm over the state-owned firm’s financial obligations and the country’s plunging oil earnings.
It detailed outstanding remittances spanning royalties, taxes, and dividends that NNPC has yet to pay into the federation account between June 2023 and April 2025.
A breakdown of the report shows that the debt is split across three major components: N3.89trn due in royalties to the NUPRC, N2.53trn in unpaid taxes to the FIRS, and N162.33bn in unremitted dividends.
Earlier this year, a World Bank report said the NNPC was remitting only half of the financial gains from the removal of petrol subsidies due to debt arrears.
It said out of the N1.1trn revenue from crude sales and other income in 2024, the NNPC only remitted N600bn, leaving a deficit of N500bn unaccounted for.
“Despite the subsidy being fully removed in October 2024, NNPC started transferring the revenue gains to the Federation only in January 2025. Since then, it has been remitting only 50 percent of these gains, using the rest to offset past arrears.
“Gross revenues collected by Nigeria’s main revenue agencies surged in 2024, despite minimal remittances from NNPC. FAAC data show that gross revenues collected by the main revenue agencies (FIRS, NCS, NNPC, and NUPRC) rose significantly from N16.5trn (7 per cent of GDP) in 2023 to N29.5trn (10.6 per cent of GDP) in 2024.
“However, NNPC was the only laggard, remitting just N0.6trn to FAAC in 2024, down from N1.1trn in 2023, largely due to the implicit PMS subsidy, which remained in place until the end of September 2024. Although the subsidy was fully removed on October 1, 2024, NNPCL did not start transferring the resulting revenue gains to the Federation until January 2025. From that point, it began remitting 50 percent, with the other half being used to settle past arrears,” the World Bank stated.
The alarming figures underscore the lingering opacity and revenue leakages in Nigeria’s oil and gas sector, despite ongoing reform efforts by President Bola Tinubu’s administration.
An analysis of the FAAC report reveals significant month-to-month volatility in the debts, suggesting irregular remittance practices.
While oil royalty obligations climbed as high as N321.99bn in September 2023, the figure dropped to N127.32bn by May 2024 and fluctuated throughout the rest of the year.
It recorded outstanding remittances across various months, notably from July 2023 to April 2025, with the largest monthly gap recorded in August 2023 at over N770bn.
Tax obligations to FIRS followed an equally unstable trend, peaking at N173.9bn in October 2023 and dipping sharply to just N34.2bn in January 2024. The highest monthly tax backlog in 2024 was N122.2bn recorded in April.
From July to December 2023 alone, royalty debts to NUPRC surged from N133.96bn to N178.47bn, while tax arrears to FIRS fell drastically from N173bn in July to N81.8bn in December. In the first quarter of 2024, royalty arrears rose again, reaching N229.49bn in March before slowing by midyear.
By the first four months of 2025, monthly royalty debts hovered above N130bn, with no signs of major reduction, while taxes remain above N64bn monthly, an indication that remittances are still largely pending.
A total of N2.03trn was owed by NNPC in 2023. This included N1.19trn in royalties and N843.28bn in taxes. However, the report explained that this amount would be handled and accounted for by the Office of the Accountant General of the Federation.
From January 2024 to April 2025, an additional N4.537trn was recorded as outstanding payments.
Meanwhile, a brought forward balance of N107.67bn was also noted in the report.
The year 2024 began with N208.57bn in outstanding oil-related payments in January. This figure increased sharply in February to N353.50bn, indicating a significant jump in unremitted funds.
By March 2024, the debt reached its highest level for the year at N532.07bn, suggesting either a rise in crude oil output without corresponding remittance or delays in payment reconciliation.
In April 2024, the amount dropped to N277.41bn, nearly half of what was owed in March. However, the figures remained well above N100bn each month, reflecting ongoing non-settlement of obligations.
From May to September 2024, the amounts hovered between N187bn and N207bn monthly. This period showed relative stability but still pointed to a consistent backlog of unpaid dues.
In October 2024, the outstanding amount spiked again to N319.56bn and by November, it jumped further to N456.09bn, the second-highest for the entire period. This sharp rise may reflect end-of-year crude export activities or unresolved backlogs.
December 2024 closed with N449.36bn, capping the year with a high volume of outstanding remittances.
In January 2025, there was a significant drop to N197.05bn, but this was short-lived. The figure increased again in February to N234.83bn and remained high in March at N213.56bn.
By April 2025, the debt stood at N204.74bn indicating that NNPC had yet to significantly reduce the outstanding payments despite sustained oil production.
The document further explained that, “The outstanding for the period up to May 2023 for loyalty. Tax and 40 percent PSC Profit due to the Federation were included in the Presidential Approved Stakeholder Alignment Committee.
“The sum of N2.03trn comprising royalty of N1.19trn and Tax of N843.28bn from June to Dec 2023 is to be accounted for by the Office of the Accountant General.
“Following the engagement between the Leadership of NNPC and the Minister of Finance and Coordinating Minister of the Economy/Chairman of FAAC, NNPC Limited remitted the 50 per cent JV Royalty & Taxes in February, March & April and May 2025 FAAC.
“The USD was converted based on the CBN advised exchange rate of the lifting month.”
SOURCE: thepointng.com