By Charles Pemu 
In a landmark move aimed at streamlining the nation’s energy sector finances, President Bola Tinubu has approved the cancellation of a significant portion of the indebtedness owed by the Nigerian National Petroleum Company Limited to the Federation Account.
This presidential directive effectively wipes off approximately 1.42 billion Dollars and 5.57 trillion Naira from the national books, following a comprehensive reconciliation exercise between the national oil company and federal stakeholders.
The details of this fiscal intervention were contained in an official document from the Nigerian Upstream Petroleum Regulatory Commission presented during the November 2025 meeting of the Federation Account Allocation Committee.
The report, titled “Report of October 2025 Revenue Collection,” revealed that the presidency sanctioned the removal of these outstanding obligations as of December 31, 2024. The decision followed recommendations from the Stakeholder Alignment Committee, which sought to harmonize conflicting records regarding royalty receivables and crude oil liftings.
Analysis of the newly adjusted figures indicates that the presidential approval eliminated roughly 96 percent of the NNPCL’s dollar-denominated debt and 88 percent of its naira obligations.
While this move resolves legacy financial friction, the NUPRC noted that fresh liabilities accrued during the 2025 operational year still stand at over 56 million Dollars and 1 trillion Naira. The commission has already implemented the necessary accounting entries to reflect these changes in the Federation’s financial records.
Despite the resolution of these legacy debts, the NUPRC report highlighted significant challenges in meeting the nation’s revenue projections for the current year. As of November 2025, the commission recorded a cumulative revenue gap of 5.65 trillion Naira.
Actual collections for the month sat at 660.04 billion Naira, falling sharply below the approved monthly target of 1.2 trillion Naira. This shortfall is largely attributed to lower-than-expected royalty payments from oil and gas production, which have consistently trailed behind budgetary projections.
The debt cancellation coincides with an ongoing stalemate between the NNPCL and audit firms hired by the Nigeria Governors’ Forum. While external consultants claim significant under-remittances totaling over 42 billion Dollars between 2011 and 2017, the NNPCL maintains that all revenues have been properly accounted for.
As the federal government pushes for greater transparency through the Petroleum Industry Act, this latest presidential intervention is seen as a strategic step toward closing old chapters of financial dispute to focus on the commercial profitability of the national oil firm.