NNPCL spends N17.5tn securing fuel pipelines, others in 12 months
Nigeria’s NNPCL Records Massive N17.5tn Debt for Pipeline Protection & Energy Security in 2024
The Federation has accumulated a staggering N17.5 trillion debt owed to the Nigerian National Petroleum Company Limited (NNPCL) for pipeline protection, energy-security operations, and under-recovery expenses carried out on behalf of the nation in the 2024 financial year.
This revelation has triggered nationwide concerns as analysts demand a full forensic audit into the spending, raising questions about persistent leakages, declining crude output, and the opaque cost structure of Nigeria’s national oil company.
According to NNPC’s 2024 consolidated financial statements, a massive N7.13 trillion was spent specifically on energy-security operations to stabilise fuel prices whenever the exchange-rate gap affected the landing cost of petrol. A significant portion was also used to safeguard critical infrastructure, including pipeline surveillance, repairs, and anti-crude theft operations.
The report further showed that NNPC declared a N5.4 trillion profit after tax for 2024 — one of its strongest financial years since becoming a limited liability company. This marks a 64% increase from its N3.297 trillion profit recorded in 2023, driven by increased crude production, improved operational efficiency, and cost-cutting measures across its assets.
However, despite its improved bottom line, NNPC disclosed that N8.67 trillion of the total amount spent in 2024 was linked directly to under-recovery on refined petroleum products, highlighting the hidden financial burden of regulated petrol pricing — contradicting the government’s claim that “fuel subsidy is gone.”
How the Debt Escalated
Under Section 64(m) of the Petroleum Industry Act (PIA) 2021, NNPC, as the supplier of last resort, must maintain energy security by keeping PMS prices regulated—meaning the excess cost of importation must be borne by the Federation.
This gap between the actual landing cost and the regulated pump price forms the basis of under-recovery, which NNPC records as receivables pending reimbursement. As of 2024, the under-recovery balance surged from N6.25 trillion in 2023 to N8.67 trillion, representing nearly 39% growth.
NNPC’s financials also recorded an additional N8.84 trillion as “Other Receivables from the Federation,” covering advance payments to the government and additional security-related expenses.
The debt nearly doubled the N9.36 trillion recorded in 2023, signalling mounting strain on NNPC’s cash flow and raising questions about the sustainability of Nigeria’s current fuel pricing model.
Experts Challenge Transparency, Demand Full Audit
Energy economists have condemned the figures as “outrageous and indefensible.”
According to Jeremiah Olatide, CEO of Petroleumprice.ng, the N17.5 trillion expenditure reinforces long-standing concerns about leakages and internal corruption within NNPCL.
He argued that despite Nigeria producing far below its capacity — averaging 1.4–1.5 million barrels per day instead of the projected 2.5–3 million barrels — the company still claims massive spending on pipeline protection.
Olatide called for a transparent, independent forensic audit, insisting that lawmakers and regulators must launch a thorough investigation.
Public finance analyst Kelvin Emmanuel also criticised the disclosures, alleging that crude oil is being allocated to armed groups under the guise of pipeline surveillance contracts. He suggested the government may have been compensating militants with crude barrels rather than monetary contracts — a claim he says is now validated by the N7.1 trillion reportedly spent on pipeline security alone.
Financial Platform Proshare Reacts
Proshare described NNPC’s performance as “commercially strong,” with total revenue rising by 87.89% from N23.99 trillion in 2023 to N45.08 trillion in 2024. Crude oil sales more than doubled to N29.21 trillion, signalling improved trading operations and consistent export volumes.
Revenue from petroleum products grew 35%, while natural gas and power surged over 125%, reflecting deeper involvement in the gas-to-power value chain.
However, Proshare warned about the rising finance costs, narrowing margins, and increased leverage ratio — all of which demand prudent liability management to avoid financial instability in the coming years.
The Bigger Picture
The reported figures reignite debates over Nigeria’s fuel subsidy regime, despite government claims that subsidies have been removed. With the Federation owing NNPC trillions in under-recovery and security-related expenses, the country faces growing financial risks, infrastructure vulnerabilities, and an urgent need for transparent reimbursement processes.
Experts warn that without clear repayment plans, increased production, tighter oversight, and accountability reforms, the financial burden could ultimately fall on Nigerian citizens.
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