•Dele Kelvin Oye
A renowned economist and Chairman of the Alliance for Economic Research and Ethics Ltd/GTE, Dele Oye, has said that the federal government’s N17.5 trillion debt owed to the Nigerian National Petroleum Company Limited (NNPCL) represents a continuation of the fuel subsidy regime under a different arrangement, despite the government’s declaration in 2023 that subsidy had been removed.
Oye, who is the immediate past President of the Organised Private Sector of Nigeria (OPSN), said that the liability, accumulated through what NNPCL describes as “energy security expenses”, “under-recovery”, and other receivables, amounts to a hidden subsidy structure that continues to pressure public finances, reports The Guardian.
He said that the removal of petrol subsidy announced by President Bola Ahmed Tinubu on May 29, 2023, did not eliminate the financial burden associated with the policy but merely shifted it into an accounting framework.
According to him, the development has created one of Nigeria’s most expensive subsidy arrangements, with the cost concealed through terminologies that make public scrutiny difficult.
“Nigeria is currently executing the most expensive subsidy programme in its history, yet almost no one is calling it by its true name. A N17.5 trillion liability has been accumulated in the shadows, hidden behind accounting terminologies designed to obscure rather than illuminate,” Oye said.
He, however, described the arrangement as inconsistent with the transparency objectives of the Petroleum Industry Act (PIA) 2021, which was enacted to promote efficiency, accountability and commercial operations in the petroleum sector.
Oye said that NNPCL’s 2024 Consolidated and Separate Financial Statements showed that the federation’s obligations to the national oil company had increased to about N17.5 trillion, compared with N9.36 trillion recorded in 2023.
He said the liability consists of N7.13 trillion classified as “Energy Security Expense,” N8.67 trillion under “Under-Recovery”, and N8.84 trillion grouped as “Other Receivables from the Federation.”
The economist also questioned the situation where NNPCL reported a record N5.4 trillion profit after tax in 2024, representing a 64 per cent increase from the previous year, while the company continued to carry substantial receivables from the federation.
Oye, who further queried the continued reliance on petrol imports despite the commissioning of the Dangote Petroleum Refinery, said the ongoing debate over domestic fuel supply and refinery operations underscored the need for clarity in Nigeria’s petroleum market structure and pricing policy.
He, therefore, called for a comprehensive forensic audit of all energy security expenses, under-recovery claims and related receivables between the Federal Government and NNPCL, saying that Nigerians deserve full disclosure of the obligations being accumulated in their name.
The former Chairman of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) also urged the federal government to prioritise domestic refining, ensure crude supply to local refineries and establish a transparent petroleum pricing system.
Meanwhile, the NNPCL has increased the pump price of Premium Motor Spirit (PMS), popularly known as petrol, to N1,270 per litre at its retail outlets in Abuja and neighbouring areas.
A market survey conducted, yesterday, showed that the state-owned oil company raised the price from N1,155 per litre, representing an increase of N115 per litre.
The latest adjustment comes amid renewed volatility in Nigeria’s downstream petroleum sector, where depot prices have continued to fluctuate and marketers have repeatedly reviewed their pump prices.
