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Federal Government, NNPCL Work Out N7.7tn Fuel Subsidy Debt Payment

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The Federal Government’s debt to the Nigerian National Petroleum Company Limited as exchange rate differential (subsidy) for importing Premium Motor Spirit (petrol) rose to N7.74tn as of September 2024, following the full implementation of downstream oil sector deregulation.

This amount represents the cost of maintaining a fixed price range in the retail market, despite purchasing the product at a higher price between June 2023 and September 2024.

The information was revealed in a presentation by the national oil company to the Federation Account Allocation Committee (FAAC) at its February meeting in Abuja. A copy of the document was obtained by our correspondent on Monday.

According to the FAAC document, the government is planning to clear the N7.74tn fuel subsidy debt within 210 days.

In August 2024, The Punch exclusively reported that the NNPCL requested a refund of N4.71tn from the government to cover outstanding debts used to import petrol.

At the time, the claim was recorded as “Exchange rate differential on PMS and other joint venture taxes” on products imported between August 2023 and June 2024.

Exchange rate differentials refer to the profit or loss resulting from the difference in value between two currencies at different times during foreign exchange transactions.

For instance, if $1 is exchanged for N1,600 today and N1,500 tomorrow, the exchange rate differential is the difference between both rates.

The government supported fuel imports by covering the gap between the projected rate and the actual cost borne by the NNPCL for importing petroleum products.

This price difference, which should ordinarily reflect in the retail price paid by consumers, is now the amount NNPCL is seeking to recover from the government.

An analysis of the document indicated that the exchange rate differential for July to September 2024 was calculated using the Nigerian Autonomous Foreign Exchange Market rate.

The document stated: “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 represents additional claims due to the actualisation of an estimated portion of 2017 to May 2023 PMS under-recovery.

A breakdown showed that the total exchange rate differential amounted to N10.499tn, with N2.756tn recovered between November 2023 and September 2024, reducing the outstanding balance to N7.74tn.

The document further explained that the weighted average of purchased USD as of February 7, 2025, was applied, and the payment is ongoing within 210 days.

The month-by-month breakdown showed that the debt rose from N1.29tn in May 2023 to N1.81tn by October 2023, increasing steadily to N7.74tn by September 2024.

The amount represents 14.07 per cent of the N54.99tn 2025 national budget.

During his inauguration on May 29, 2023, President Bola Tinubu declared that “subsidy is gone”, marking the end of a policy that had hindered economic growth.

However, global organisations such as the International Monetary Fund and World Bank claimed that fuel subsidies were quietly reintroduced.

A proposed economic stabilisation plan document in June 2024 indicated that the government planned to spend around N5.4tn on fuel subsidies.

In a previous interview with The PUNCH, energy expert Wumi Iledare questioned the NNPCL’s request, stating:

“If you look at the taxes paid by the international oil companies, they are tax oil which NNPCL sells on behalf of the government and gives the government the dollar. So, it is very difficult for me to understand why the Federal Government has to return any money to NNPCL.

“Unless NNPCL is saying that it is the one funding the government in dollar equivalent, and since the government is changing the exchange rate to the tune of N1,500, the government cannot keep the windfall profit because the government now has more than when the exchange rate was N700.”

He added:

“It is very difficult for me to comprehend the rationale because the government is the owner of the equity, the government owns the tax oil, and the government is the owner of the royalty oil that the NNPCL is selling on its behalf.”

Meanwhile, FAAC members have criticised the NNPCL for inconsistent revenue reporting.

The Ogun State Accountant-General, Tunde Aregbesola, raised concerns about declining revenue compared to November 2024 figures.

The minutes read:

“AG Ogun observed that there was a significant decline in revenue compared to November 2024 in-flow, and upon reviewing the financial records, particularly note 7, it was noted that the receivables from NNPCL amounted to approximately N10.8tn.

“However, there are concerns about the accuracy of the figures as reports suggest that NNPCL may still be reconciling the figures.”

The Chairman, Oluwatoyin Madein, stated that the issue involved the NNPCL and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), with reconciliation ongoing through the Alignment Committee.

She stressed the importance of thorough reconciliation to ensure all issues are addressed.

The representative assured members that the reconciliation would cover up to December 2024.

 

Credit: The Punch

BIG STORY

Aso Rock Not A Party Office — Holding NEC Meeting There An Aberration — ADC To APC

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The African Democratic Congress has criticised the All Progressives Congress for conducting its national executive committee meeting at the State House in Abuja.

In a Friday statement, Bolaji Abdullahi, interim national publicity secretary of ADC, noted that the State House is neither a party office nor a private residence.

President Bola Tinubu presided over the APC NEC meeting on Thursday at the Banquet Hall of the State House. During the session, the party named Nentawe Yilwatda, the minister of humanitarian affairs and poverty reduction, as its new national chairman.

Yilwatda replaced Abdullahi Ganduje, who stepped down from the position in June.

Abdullahi responded to the appointment by stating that the ADC hopes the “appointment” of Yilwatda “might trigger a shift in tone, temperament, and trajectory for a party that has too often equated governance with propaganda, and power with impunity”.

He also expressed the hope that the APC would demonstrate “greater tolerance” for opposing voices under Yilwatda’s leadership.

He added, “We hope Professor Yilwatda will channel his high education and experience towards improving the democratic credentials of his party and its government, which, so far, has been marked by intolerance and what has often appeared like a deliberate plan to eliminate all opposition parties and foist a one-party rule on the country.”

He said it was concerning that the National Executive Committee meeting “was held within the confines of the State House — a public institution, funded by the Nigerian people, not a party office or private residence.”

He described the APC’s decision to host a party meeting at the seat of government as “an aberration that underlines how far this government has strayed from the foundational norms of democratic accountability.”

He called on the new chairman to ensure the party “respects the line — now dangerously blurred — between party and state.”

Abdullahi also highlighted Yilwatda’s former role as a Resident Electoral Commissioner, saying, “This is no small credential. It comes with a deep understanding of electoral ethics, neutrality, and public trust.”

He continued, “We sincerely hope he will draw on this experience to promote the sanctity of our electoral processes, rather than using insider knowledge to game the system in favour of his party, as has often been the case under the APC’s watch.”

He concluded, “In closing, we pray for Professor Yilwatda that may his tenure be longer than those of his predecessors and his exit more honourable.”

This is not the first time an APC NEC meeting has been hosted at Aso Rock. The ruling party previously held a similar meeting at the presidential villa in 2020.

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BIG STORY

Over 4,000 Inmates Freed In Push For Justice Reform — Interior Minister Tunji-Ojo

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The federal government has announced the release of over 4,000 inmates from correctional facilities nationwide as part of its justice system reform efforts.

Olubunmi Tunji-Ojo, the minister of interior, made this known on Thursday during a meeting with Chinedu Ogah, chairman of the house of representatives committee on reformatory institutions, in Abuja.

He stated that the inmate population has decreased from over 86,000 to around 81,450 following a review process focused on cases involving minor infractions.

“The correctional service remains a key priority. We must uphold the dignity of even the most vulnerable citizens,” he said.

Tunji-Ojo praised the national assembly for backing the ministry’s reform initiatives and highlighted the importance of collaboration between the executive and legislative branches in achieving lasting changes.

Ogah remarked that the minister’s actions are in line with President Bola Tinubu’s broader goals for justice reform and national progress.

This federal initiative coincides with similar actions at the state level aimed at easing overcrowding in correctional centres.

In May, Halima Mohammed, chief judge of Gombe, authorised the release of 85 inmates from the custodial facilities in Gombe and Billiri.

That decision came after inspections by the state’s criminal justice and inquiry committee across four correctional centres.

The chief judge explained that the visits were intended to identify inmates qualified for bail or outright release.

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BIG STORY

PDP Will Finish Fourth In 2027 Elections — Many Leaders Have Been Eased Out — Fayose

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Ayodele Fayose, former governor of Ekiti, has said that the Peoples Democratic Party (PDP) has lost its structure and may likely end up in fourth place in the 2027 general election.

During an interview on Channels Television’s Politics Today on Friday, Fayose explained that the opposition party has been weakened by internal strife and the exclusion of its key figures.

“You know the situation of our party today, and it is in my prayer that the PDP does not come fourth in the coming elections,” he said.

“When I came here, I said the party was already going into carcass.

“Pretenders can pretend, but you know that managing the party has become an issue; everybody in that party today is doing to your tent, o Israel.

“Today, I am telling you the PDP will come fourth in the general elections. In most states, they are already compromised.

“They have eased out so many leaders. It’s good for them, but let me remind you, I was part of the G5.”

Fayose added that the PDP has lost much of its strength, pointing to the departure of influential members.

“In the same PDP, the presidential candidate has left, the vice-presidential candidate has left, senators have left, and governors have left,” he said.

He noted that although he was invited to the party’s last national executive committee (NEC) meeting, he stayed away because he felt sidelined.

Fayose also suggested that President Bola Tinubu offers the quickest route for the north to regain power after his tenure.

He referred to a past conversation with the president where Tinubu described the All Progressives Congress (APC) as the “shortest political link between the north and the south”.

“I recall he told me that the shortest distance between the north and the south is APC,” Fayose said.

“I could not understand at the time because he told me that after Buhari’s four years, anybody should be able to wait for another four years.

“So, zoning to the south by the PDP is good for them because today Tinubu is the shortest distance for power to return to the north.”

Fayose clarified that he has not left the PDP but remains open to working with any political party.

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