The Federal Government is working out modalities to settle the N7.74 trillion fuel subsidy debt within a period of 210 days.
The government’s indebtedness to the Nigerian National Petroleum Company Limited (NNPCL) as exchange rate differential (subsidy) for the importation of Premium Motor Spirit (petrol) rose to N7.74 trillion as of September 2024, when the deregulation of the downstream oil sector was fully implemented.
The details were contained in a presentation by the NNPCL to the Federation Account Allocation Committee (FAAC) at its February meeting in Abuja.
The amount covers the cost of maintaining a specific price range in the retail market, despite acquiring the product at a higher rate between June 2023 and September 2024.
About six months ago, the NNPCL demanded a refund of N4.71 trillion from the federal government to settle outstanding debts used to import petrol.
The FAAC document also revealed that the exchange rate differential for the period of July to September 2024 was estimated based on the Nigerian Autonomous Foreign Exchange Market rate.
“Thus, the actual differentials may change in line with the prevailing forex (foreign exchange) rate at the time of import settlements.”
The balance brought forward is the additional claim due to the actualisation of an estimated portion of 2017 to May 2023 PMS under-recovery.
The document further showed that the total sum of the exchange rate differential due was N10.499 trillion, but N2.756 trillion was the exchange rate differential recovered between November 2023 and September 2024, thus reducing the cumulative outstanding amount to N7.74 trillion.
The document further remarked that the weighted average of purchased USD as of February 7, 2025, was applied and that payment is ongoing within 210 days.
According to details as contained in the document, the debt with an outstanding balance of N1.29 trillion increased to N1.402 trillion in June 2023, N1.48 trillion in July 2023, N1.535 trillion in August, N1.59 trillion in September, and N1.81 trillion in October 2023. The claims increased by N662.9 billion to N2.378 billion in November, and by another N616.38 billion to N2.94 trillion in December 2023.
The document further indicated that the figure increased to N3.57 trillion in January 2024, N3.96 trillion in February, N4.68 trillion in March, N5.81 trillion in April, N6.47 trillion in May, and N6.97 trillion as of June 2024.
In July 2024, it increased to N7.46 trillion, N7.66 trillion in August, and N7.74 trillion in September 2024. The amount represents 14.07 per cent of the N54.99 trillion 2025 national budget.
