Nigeria’s national oil company, the Nigerian National Petroleum Company Limited (NNPC), has revealed that the Federation owes it a massive N17.5 trillion for expenses incurred on pipeline protection and energy-security operations in 2024.
The figure, drawn from NNPC’s 2024 consolidated financial statements, has sparked widespread concern among economic experts, who are demanding an independent forensic audit to clarify how such a huge sum was spent.
Breakdown of the N17.5tn
A large portion of the total includes:
N7.13tn in energy-security costs — used to stabilise petrol prices whenever foreign exchange and landing cost gaps widened.
N8.67tn in under-recovery costs — reflecting the difference between the actual import cost of Premium Motor Spirit (PMS) and the fixed regulated pump price.
N8.84tn listed as “Other Receivables from Federation” — covering advance payments and additional security expenses for safeguarding oil and gas infrastructure.
Under the Petroleum Industry Act (PIA) 2021, any cost incurred by NNPC as the energy “supplier of last resort” must be borne by the Federal Government. This means the company is entitled to reimbursement for losses made while keeping PMS prices artificially low.
Despite President Bola Tinubu’s declaration in May 2023 that “fuel subsidy is gone,” the financial report suggests that under-recovery — effectively, subsidy — is still ongoing through another channel.
Performance and Profit Figures
NNPC also announced a N5.4tn profit after tax for 2024, a significant rise from N3.297tn in 2023.
Revenue grew by nearly 88%, driven largely by higher crude sales, increased efficiency, and expanded operations in gas-to-power and service segments.
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Experts Raise Red Flags
Energy economists and financial analysts have reacted strongly to the N17.5tn spending:
Jeremiah Olatide (Petroleumprice.ng)
Described the expenditure as “outrageous”
Called for a transparent, independent forensic audit
Questioned how such costs can be justified given Nigeria’s low crude production levels
Argued that internal corruption and collusion continue to drive crude theft
Kelvin Emmanuel (Public Finance Analyst)
He reinforced long-standing allegations that militants and armed groups receive crude allocations under the guise of pipeline surveillance contracts.
According to him, the figures confirm that up to 78,000–110,000 barrels per day may be going to non-state actors as part of pipeline protection arrangements.
Wider Concerns
The massive expenses raise major questions about:
The true state of subsidy removal
The transparency of pipeline protection contracts
The sustainability of NNPC’s cash flow
The government’s ability to reimburse the debt
Despite the large profit recorded, the mounting receivables and security expenditures have placed enormous pressure on the company’s balance sheet.
Experts insist that only a detailed forensic investigation can address Nigeria’s long
