Senate Probes NNPCL Over ₦3.1tn Subsidy Debt Owed Federation Account

The Nigerian Senate has empanelled an ad-hoc committee to investigate NNPC Limited over a ₦3.1 trillion shortfall in remittances to the federation account, the largest unresolved oil revenue discrepancy in recent memory.

The committee, chaired by a senior senator from the Niger Delta, has summoned the Group Chief Executive Officer of NNPC Limited and several senior officials to appear before it within fourteen days.

**Background to the Dispute**

The shortfall relates to a complex accounting dispute over residual fuel subsidy costs that NNPC says it absorbed on behalf of the federation during the transition period following the removal of the consumer petrol subsidy in 2023.

NNPC has argued that it is owed reimbursements for billions of naira spent to maintain supply at below-market prices during a transition window that the corporation says was implicitly approved by the executive.

The Accountant General's office, however, contends that no such formal arrangement was in place and that NNPC is obligated to remit the full proceeds of crude oil sales to the federation account without deduction.

**States Feeling the Pressure**

The shortfall has squeezed state governments that depend on monthly federation account allocations (FAAC) to fund salaries, services, and infrastructure. Several governors have raised the issue directly with President Tinubu's economic team.

The Revenue Mobilisation Allocation and Fiscal Commission has flagged the matter as a systemic risk to fiscal federalism, warning that persistent shortfalls could trigger cash crises in states with limited internal revenue capacity.

**NNPC's Response**

NNPC Limited issued a brief statement acknowledging the Senate probe and saying it would cooperate fully with the committee. It declined to comment on the specific figures until it had reviewed the committee's terms of reference.

**What the Committee Will Do**

The ad-hoc committee has 60 days to complete its investigation and present findings to the Senate chamber. It has powers to subpoena documents and compel testimony from public officials.