The Nigerian National Petroleum Company Limited (NNPC) has made a shocking financial disclosure. The Federal Government owes the company N17.5 trillion.
This debt covers pipeline protection and energy security costs for the 2024 financial year. Consequently, industry experts are demanding an immediate forensic audit. Analysts cite persistent oil theft and low crude production as reasons to question the massive bill.
Breakdown of the Debt
The company’s 2024 financial statements reveal the details. The liability is split across key operational areas:
- Energy Security Costs (N7.13tn): This amount stabilized petrol prices. It covered the gap between import costs and the regulated pump price.
- Under-Recovery (N8.67tn): These are direct costs from selling fuel below market rates.
- Pipeline Protection (N8.84tn): This covers surveillance, repairs, and anti-theft operations.
Under the Petroleum Industry Act (PIA) 2021, the Federation must reimburse these costs. However, the report indicates that repayment timelines remain unclear.
Is the Subsidy Really Gone?
This disclosure raises difficult questions. It challenges President Bola Tinubu’s declaration that “fuel subsidy is gone.”
The data suggests the government still incurs massive costs. It keeps fuel prices artificially low despite the official removal of the subsidy regime.
The debt profile shows a sharp escalation. Energy-security costs jumped from N4.84 trillion in 2023 to N7.13 trillion in 2024. Furthermore, total under-recovery expenses climbed by nearly 40 percent.
Profitability Amidst Liability
Despite the mounting debt, the NNPC posted strong results. The company declared a Profit After Tax of N5.4 trillion for 2024. This represents a 64 percent increase from the previous year.
Revenue surged by nearly 88 percent to N45.08 trillion. This was driven largely by crude oil sales. However, financial analysts warn that the quality of these earnings requires careful oversight.
Experts React to “Outrageous” Spending
The scale of the expenditure has drawn sharp criticism. Jeremiah Olatide, an energy economist, described the N17.5tn figure as “outrageous.”
“How do you justify such a humongous expense when production remains depressed?” Olatide asked. He noted that production is stuck at 1.4–1.5 million barrels per day.
Public finance analyst Kelvin Emmanuel agreed. He suggested the disclosures validate old allegations. He believes crude oil is being allocated to armed groups for surveillance contracts.
“I am sure the 78,000 to 110,000 barrels per day loss is now confirmed,” Emmanuel stated. He urged the government to overhaul the opaque security architecture immediately.
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