BREAKING NEWS: Oil Money Wiped Clean as Revenue Crisis Deepens
Nigeria’s fiscal landscape has been jolted by a bombshell revelation: President Bola Tinubu has approved the cancellation of the bulk of the Nigerian National Petroleum Company Limited’s long-standing debts to the Federation Account effectively erasing about $1.42 billion and ₦5.57 trillion after a high-level reconciliation exercise.
The decision, now stirring intense controversy, raises fresh questions about transparency, accountability, and who ultimately bears the cost of Nigeria’s oil sector legacy problems.
Presidency Approves Massive Debt Wipe
The approval was disclosed in an official document prepared by the Nigerian Upstream Petroleum Regulatory Commission and presented at the November meeting of the Federation Account Allocation Committee.
According to the report, debts previously standing at over $1.48bn and ₦6.33tn were reviewed and largely struck off following presidential authorisation.
Nearly All Dollar Debt, Most Naira Obligations Erased
The reconciliation exercise wiped out roughly 96% of the dollar-denominated liabilities and about 88% of the naira obligations owed by Nigerian National Petroleum Company Limited to the Federation as of December 31, 2024.
The directive followed recommendations by a Stakeholder Alignment Committee set up to untangle years of disputed royalty and crude lifting obligations between NNPC and the Federation.
Fresh Debts Still Hanging
Despite the sweeping cancellation of legacy balances, new liabilities continue to pile up. Obligations incurred between January and October 2025 reportedly remain above $56.8m and ₦1.02tn, although part of the dollar component has been recovered.
Regulators confirmed that accounting entries have already been adjusted, effectively locking the write-off into Nigeria’s public finance records.
Timing Raises Eyebrows as Revenue Falls Short
The debt wipe comes amid a worsening revenue crisis. Official data shows the upstream regulator missed its November 2025 revenue target by over ₦544bn, while royalty collections collapsed far below projections.
Cumulatively, Nigeria’s upstream revenue shortfall for 2025 reportedly exceeds ₦5.6tn, intensifying scrutiny over the decision to forgive trillions in oil-related debts.
Old Ghosts, New Battles
The move reopens unresolved disputes over historic under-remittances. A long-running clash between NNPC and audit firm Periscope Consulting, hired by the Nigeria Governors’ Forum, centres on allegations of $42.37bn in missing oil revenue between 2011 and 2017.
While NNPC insists no money is owed, auditors maintain that massive gaps remain unexplained. FAAC has now ordered both sides back to the table for yet another reconciliation.
World Bank Red Flags Resurface
The controversy also revives earlier warnings from the World Bank, which accused NNPC of persistent revenue leakages and incomplete remittances even after fuel subsidy removal.
The Bank alleged that only half of certain crude revenue gains were transferred to the Federation, with the rest quietly used to offset past arrears.
Transparency Promises Under Pressure
NNPC’s Group CEO has repeatedly promised openness and clean books, but critics argue that writing off trillions without public debate undermines trust and shifts the burden of inefficiency onto Nigerians.
As oil revenues shrink and debts disappear from the books, the question echoing across the country is stark: who truly pays for Nigeria’s oil sector losses?
