NNPCL’s N17.5tn Pipeline Security Spending Sparks Audit Demands in 2024 Financial Review
Nigeria’s national oil company, the Nigerian National Petroleum Company Limited (NNPCL), has revealed that the Federation owes it an extraordinary N17.5tn for pipeline protection, fuel pricing stability, and broader energy-security operations carried out in 2024. The disclosure, contained in the company’s latest consolidated financial statements, has reignited concerns over transparency and the true state of Nigeria’s fuel-subsidy regime despite earlier declarations that “subsidy is gone.”
A closer look at the figures shows that N7.13tn of the total spending went into stabilising petrol prices whenever the gap between the exchange rate and the cost of imported refined fuel widened. Another large portion was committed to securing Nigeria’s fragile oil infrastructure — from pipeline surveillance and repairs to combating crude theft and maintaining an uninterrupted energy supply. Though the company reported a record N5.4trillion profit after tax in 2024, analysts say the massive energy-security bill overshadows its gains.
The report also indicates that under-recovery — the difference between the actual import cost of petrol and the regulated pump price — rose sharply, with NNPCL recording N8.67tn in recoverable costs tied to the Federation. Another N8.84tn in receivables was logged for advances made to the government and additional security operations. Despite these soaring numbers, the financial statement did not clarify whether the Federal Government has refunded any portion of the outstanding amounts.
Experts have reacted strongly to the disclosures, describing the N17.5tn expenditure as “outrageous” and demanding a forensic audit. Energy economist Jeremiah Olatide argued that the figures point to deep-rooted leakages and possible internal complicity in oil theft, especially when national crude output still hovers between 1.4 and 1.5 million barrels per day, far below Nigeria’s potential. Public finance analyst Kelvin Emmanuel added that the spending validates long-standing claims that crude oil is quietly allocated to armed groups under pipeline protection arrangements, fueling a cycle of dependency and opacity.
While NNPCL’s revenue jumped by nearly 88% — driven largely by crude sales and improved operational efficiency — analysts warn that the company’s growing receivables and rising debt burden could threaten its financial stability. Many now insist that without transparent accounting, third-party verification, and a complete overhaul of Nigeria’s security-for-oil model, the rising cost of keeping fuel prices artificially low and pipelines secure will continue to strain both NNPCL’s books and the nation’s already vulnerable economy.
source: punch