Key Points

• NNPCL records N17.5tn spent on security and under-recovery in 2024.
• Analysts call for a forensic audit of the spending.
• Under-recovery and security debts nearly double previous year.

The Nigerian National Petroleum Company Limited booked N17.5tn as money owed by the Federation for pipeline protection and energy-security expenses in 2024.

The figure comes from NNPCL’s audited financial statements and covers surveillance, repairs, anti-theft operations and the cost of keeping petrol at a regulated price.

Analysts pushed for a forensic audit. They argued that the spending does not match persistent leakages, low crude output and the long-running opacity around pipeline protection.

Heavy Burden From Under-Recovery

NNPCL listed N8.67tn as under-recovery on refined petrol. The bill reflects the gap between the real landing cost of Premium Motor Spirit and the regulated pump price the company must maintain as the supplier of last resort.

The year opened with an under-recovery balance of N6.25tn. After exchange-rate adjustments, the figure settled at N6.21tn.

Energy-security costs then surged to N7.13tn, up from N4.84tn the previous year. By the end of December, the amount owed under energy-security expenses had risen to N8.67tn.

Another N8.84tn sat under “Other Receivables from Federation,” covering advance payments to the government and more security operations on oil and gas infrastructure.

Profit Rises but Pressure Mounts

NNPCL reported a profit after tax of N5.4tn for 2024. That marks a 64 percent jump from 2023. The company linked the rise to higher production volumes, tighter spending and improved operations across its assets.

Yet the spending on regulated fuel prices continues to raise concerns. President Bola Tinubu had announced the end of fuel subsidy in May 2023.

The figures now show that the government still supports petrol pricing through reimbursement obligations passed on to NNPCL.

The 2024 debt almost doubled the N9.36tn recorded in 2023. The company’s financial statements gave no clarity on when the Federal Government plans to settle the outstanding amount.

Analysts Demand Audit

Energy economist Jeremiah Olatide argued that N17.5tn on pipeline security and energy-security costs cannot be justified when crude output still hovers around 1.4 to 1.5 million barrels per day.

He warned that long-standing leakages and internal collusion remain a major challenge.

Public finance analyst Kelvin Emmanuel linked the spending to crude allocations granted to armed groups under pipeline protection contracts.

He urged an overhaul of the pipeline security system and full third-party verification of payments.

Rising Revenue Across Segments

Proshare, a Nigerian financial research platform, reviewed the statements and noted strong revenue performance. Total revenue grew by almost 88 percent to N45.08tn.

Crude oil sales more than doubled to N29.21tn. Revenue from petroleum products rose by 35 percent. Natural gas, power and other services also recorded major jumps.

Throughput charges climbed to N145.7bn. Marketing and distribution costs reflected the movement of products through depots inside and outside Nigeria.

Proshare highlighted concerns about rising finance costs, higher leverage and growing inventories.

The platform stressed the need for tighter cash-flow management as NNPCL enters a more commercially driven phase under the Petroleum Industry Act.