Fresh details have emerged clarifying the nature of a massive debt waiver granted to the Nigerian National Petroleum Company Limited (NNPC Ltd.), revealing that the company's core royalty obligations to the Federation Account were not written off.
What Was Actually Waived?
Independent findings, confirmed by sources to The Guardian, show that the Federal Government did not grant a wholesale cancellation of NNPC's royalty debts. Instead, the approval covered only the accumulated interest and penalties that resulted from the company's late payments. These delays were largely attributed to the financial strain of petrol subsidy under-recovery in 2023 and 2024, which severely constrained NNPC's cash flow.
"No royalty was written off. What was waived were interest and penalties resulting from late payment," a source clarified, noting that NNPC has consistently remitted its core royalty payments as they fall due since July of last year.
The Figures and The Controversy
The waiver, approved by President Bola Tinubu, involved amounts totalling approximately $1.42 billion and N5.57 trillion. This decision was documented in a report by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) presented at the November Federation Account Allocation Committee (FAAC) meeting.
However, the Resource Centre for Human Rights and Civic Education (CHRICED) has strongly criticised the government's action. The group labelled the waiver as fiscally reckless, opaque, and unconstitutional, arguing it was approved without public scrutiny, legislative backing, or an independent audit.
CHRICED's Stern Warning
In a statement issued in Abuja, CHRICED's Executive Director, Ibrahim Zikirullahi, warned that the decision sets a dangerous precedent. He emphasised that it comes at a time when Nigeria is grappling with severe revenue shortfalls and mounting fiscal pressures on state and local governments.
Zikirullahi noted that the waiver effectively cancels about 96% of NNPC's dollar-denominated debts and 88% of its naira obligations previously on the books. This, he argued, deprives the Federation Account of crucial funds meant for sharing among the three tiers of government. He linked the move to alarming revenue underperformance by the NUPRC, which is reportedly behind its 2025 revenue target by over N5.65 trillion.
The development underscores ongoing tensions between revenue generation, corporate obligations, and public accountability in Nigeria's critical oil and gas sector.
