The Federal Government has cancelled a combined debt of 1.42 billion and N5.57 trillion owed by the Nigerian National Petroleum Company Limited (NNPC). This move is part of a broader strategy to restructure public finances and improve the national oil company’s liquidity.
According to the latest Fiscal Policy and Economic Plan document released by the Ministry of Finance, the government removed these legacy debts from NNPC’s books to clear long-standing financial obligations and strengthen the firm’s commercial viability. The debts stemmed from decades of fuel subsidies, importation costs, and under-recovered revenue.
Officials explained that writing off the debt would help NNPC operate more efficiently in the competitive oil and gas sector, especially after its transformation into a limited liability company under the Petroleum Industry Act (PIA).
The government also aims to reduce the fiscal burden of subsidy-related arrears on national finances. By removing the debt, authorities expect to improve investor confidence in the oil sector and pave the way for new partnerships and investments.
Analysts say the move signals a shift towards transparency and accountability in managing national oil assets. However, critics warn that without reforms in subsidy policy and revenue management, debt accumulation could return.
The Finance Ministry said the debt cancellation aligns with President Bola Tinubu’s economic reform agenda and efforts to stabilise public-sector finances. It also reaffirmed the government’s commitment to ending unsustainable fuel subsidies and ensuring NNPC operates like a commercially focused company.
