NNPC Debt Crisis: Subsidiary Obligations Surge to ₦30.3 Trillion Amid Financial Pressures
The Nigerian National Petroleum Company Limited (NNPC) is grappling with significant financial strain as debts owed by its subsidiaries and related entities soared to ₦30.3 trillion by the end of 2024. This represents a staggering 70.4% increase—₦12.52 trillion more than the ₦17.78 trillion reported in 2023—according to the company’s audited financial statements. The surge reflects growing obligations across refineries, trading units, and gas infrastructure companies under the NNPC umbrella.
NNPC operates 32 subsidiaries, yet only eight remained debt-free to the parent company during the period. Analysts say the rising inter-company balances underscore persistent financial weaknesses despite ongoing reforms aimed at transforming the national oil company into a profit-driven enterprise. The figures reveal that while the company reported strong headline profits, the underlying structural challenges remain significant.
The company has been navigating public scrutiny over debt write-offs to the Federation Account while pushing ahead with plans to divest non-core assets. Recently, President Bola Tinubu approved the cancellation of a substantial portion of NNPC’s obligations to the Federation, totaling about $1.42 billion and ₦5.57 trillion, following a reconciliation exercise. Despite posting a profit after tax of ₦5.4 trillion on revenue of ₦45.1 trillion in 2024, experts caution that these headline figures mask deep-seated financial pressures.
The heaviest debts came from NNPC’s refining and trading arms. Port Harcourt Refining Company owed ₦4.22 trillion, Kaduna Refining and Petrochemical Company ₦2.39 trillion, and Warri Refining and Petrochemical Company ₦2.06 trillion, reflecting persistent operational inefficiencies. Meanwhile, NNPC Trading SA’s liabilities skyrocketed to ₦19.15 trillion, more than double the previous year, highlighting the concentration of risk within trading operations. Other subsidiaries, including gas, pipelines, marketing, and power units, also recorded notable debts.
NNPC’s own payables to subsidiaries climbed to ₦20.51 trillion in 2024, up from ₦14.17 trillion in 2023, with the largest exposure tied to NNPC Trading Limited. Borrowings also rose sharply, driven by projects such as the Gwagwalada Independent Power Project. While NNPC accelerates plans to sell stakes in refineries, pipelines, and other assets to improve liquidity, the soaring inter-company balances highlight the extensive financial restructuring still needed to secure the company’s long-term stability.
source: business day