Experts demand answers as NNPC’s N17.5tn energy-security bill sparks outrage

Energy experts and public finance analysts have raised concerns following revelations that the Nigerian National Petroleum Company Limited (NNPC Ltd) incurred a massive N17.5 trillion in pipeline protection, under-recovery, and other energy-security related expenses in the 2024 financial year.

The figure, contained in NNPC’s 2024 consolidated financial statements, has triggered calls for a full probe into what analysts describe as a troubling pattern of unverified spending, widening receivables, and persistent opacity around the company’s security operations.

Analysts say a breakdown of the N17.5tr shows that N7.13trn was spent on energy-security costs, essentially to prevent petrol prices from rising beyond a government-fixed threshold, while N8.67trn went into under-recovery on petrol imports.

An additional N8.84trn was booked as receivables from the Federation, reflecting advances made to the Federal Government and security-related outlays for protecting oil and gas assets.

Despite the huge expenses, analysts note that crude production has remained far below Nigeria’s potential, and losses from theft and vandalism persist.

Energy economist and CEO of Petroleumprice.ng, Jeremiah Olatide, described the disclosures as “beyond alarming”, noting that the figures raise the strongest indication yet of systemic inefficiencies within the national oil company.

“This N17.5trn expenditure cannot be justified by current production realities,” he said to Punch. “Nigeria is still struggling to produce around 1.4 million barrels per day. How do you spend this much on pipeline protection and still face widespread theft and vandalism?”

Olatide said the numbers point to “deep institutional leakages” and insisted that the National Assembly and regulatory agencies must initiate a forensic audit.

Public finance analyst and Dairy Hills co-founder, Kelvin Emmanuel, said the revelations reinforce claims that pipeline protection has evolved into a shadowy, unregulated system where crude oil is allegedly diverted to armed groups as payment.

He argued that the N7.13trn spent on energy-security operations exposes the scale of Nigeria’s opaque pipeline surveillance framework.

“These figures vindicate earlier warnings that crude barrels are allocated daily to militants for so-called protection duties,” he wrote on X. “The estimated 78,000 to 110,000 barrels per day being diverted now looks more credible than ever.”

Emmanuel said only third-party verification, open contracting, and a restructuring of the entire security architecture can restore trust.

The disclosures have also revived the controversial debate over fuel subsidy. Though President Bola Tinubu announced in May 2023 that “fuel subsidy is gone”, the 2024 financials show continued under-recovery costs borne by NNPC and reimbursed, at least on paper, by the Federation under Section 64(m) of the Petroleum Industry Act.

Analysts warn that this arrangement masks the true cost of fuel pricing and puts strain on NNPC’s cash flow, as receivables owed by the government balloon.

While NNPC reported a record N5.4tn profit after tax in 2024, experts argue that the company’s bottom line cannot overshadow the unresolved questions around its rising operational costs, heavy debt, and escalating security spending.

Olatide said the figures “demand a national conversation”, warning that without a transparent audit, Nigeria could continue to lose trillions in a system plagued by opacity.

Analysts agree that the 2024 figures, almost double the N9.36trn recorded the previous year, signal a critical need for structural reforms, both in NNPC and in Nigeria’s broader energy-security framework.