The Nigerian National Petroleum Company Limited (NNPCL) has notified the Federal Account Allocation Committee (FAAC) of an outstanding debt of N4.56 trillion, accumulated due to selling petrol at subsidized prices between August 2023 and June 2024.
This revelation was made during FAAC meetings in July and August, according to documents reviewed by Nairametrics.
The debt represents unrecovered funds stemming from exchange rate differentials on the importation of Premium Motor Spirit (PMS). As of May 2024, the outstanding amount was N4.34 trillion, but it has since risen to N4.56 trillion by June 2024.
In response, the Revenue Mobilization Allocation and Fiscal Commission (RMAFC) has requested detailed information from NNPCL, including the volume of PMS imported, the pricing structure, and sales values to justify the weighted exchange rate applied.
This request comes amid growing concerns from state finance commissioners, who are seeking clarity and accountability regarding the massive debt.
The situation has raised questions about NNPCL’s operations, particularly its decision to source U.S. dollars for transactions when crude oil is already sold in the same currency.
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State finance commissioners have called for greater transparency from NNPCL and suggested that the company should operate more independently to manage its transactions without relying on the Federation Account.
Despite President Bola Tinubu’s announcement of fuel subsidy removal in May 2023, indications suggest that the government continues to spend billions on subsidies, a claim that the federal government and NNPCL have consistently denied. However, NNPCL’s financial statements reveal that the government incurred a debt of N5.1 trillion in under-recovery and energy security expenses for fuel importation in 2023, further complicating the narrative around subsidy payments in Nigeria.
