The Nigerian National Petroleum Company Limited (NNPCL) has disclosed that the Federation accrued a staggering N17.5 trillion debt to the company in the 2024 financial year, primarily for pipeline protection and costs incurred from stabilizing the price of Premium Motor Spirit (PMS), commonly known as petrol.
This massive expenditure, detailed in the company’s recently released consolidated financial statements, has prompted calls from analysts for a forensic audit. They point to the paradox of such high spending amid persistent pipeline vandalism, crude oil theft, and ongoing opacity in the state-owned oil giant’s operations.
A breakdown of the N17.5 trillion reveals two major components:
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N8.67 trillion was spent on “under-recovery” for refined petroleum products, a cost stemming from the difference between the high import cost of petrol and the government’s regulated selling price.
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N8.84 trillion was classified as “Other Receivables from Federation,” covering advances to the government and security costs for protecting critical oil and gas infrastructure.
The report justifies these costs under Section 64(m) of the Petroleum Industry Act (PIA) 2021, which designates the NNPCL as the “supplier of last resort” for energy security, with associated costs to be borne by the Federation.
This disclosure appears to contradict President Bola Tinubu’s famous declaration on May 29, 2023, that “fuel subsidy is gone.” The data shows that energy-security costs, which effectively function as a subsidy, rose sharply to N7.13 trillion in 2024, up from N4.84 trillion in 2023.
The figures underscore the immense financial burden on the NNPCL as it balances its commercial interests with its state-mandated role of ensuring national energy security, leaving the timeline for the repayment of this accumulating debt unclear.
