Questions Over NNPCL’s N7.1trn “Energy Security” Spending in 2024

By Victor Idajili

The Nigerian National Petroleum Company Limited, NNPCL, is facing fresh questions over its claim of spending N7.13 trillion on “energy security” in 2024.

The figure was contained in NNPCL’s 2024 audited financial report released in November 2025. The company listed the amount under “Under Recovery/Energy Security Expense” without giving a detailed breakdown.

  
The report cited Section 64(M) of the Petroleum Industry Act, 2021, which allows NNPCL to act as supplier of last resort and charge related costs to the Federation.

It explained that the expense arises mainly from the gap between the actual landing cost of imported Premium Motor Spirit, PMS, and the regulated pump price set by government.  

“The under recovery is essentially the difference between the actual landing cost of the product and the regulated price. This balance is used to reduce the cost of sales of the Group. The corresponding entry is either used to reduce the liability due to the Federation or used as a receivable from the Federation,” the report stated.

NNPCL also said the government directed it not to sell PMS above a fixed price, even when import costs were higher.

According to the report, the total amount the Federation owed NNPCL for “interventions” in 2024 stood at N17.512 trillion. This includes N8.67 trillion classified as “energy security cost” and N8.84 trillion as “other receivables from the Federation.”

The “energy security expense” for 2024 was N7.1 trillion, up from N4.8 trillion in 2023. NNPCL said it also covers differences caused by exchange rate variations used in pricing PMS, as well as costs of protecting oil and gas assets.

 
The African Democratic Congress, ADC, on Monday called on President Bola Tinubu, NNPCL and the National Assembly to publicly account for the spending.

ADC National Publicity Secretary, Bolaji Abdullahi, said the N7.13 trillion recorded for 2024 rises to about N17.5 trillion when other fuel-related costs are added.

“Only a few years ago, Nigerians debated a pipeline surveillance contract worth about N48 billion. Today, the audited accounts record N7.13 trillion under ‘Energy Security’ for 2024,” Abdullahi said. 

He said while protecting oil infrastructure is important, such huge spending must be explained. The party also referenced reports linking Tantita Security Services Nigeria Ltd, owned by Government Ekpemupolo, aka Tompolo, to pipeline surveillance contracts, and demanded full details of all energy security contracts awarded since May 2023.

“The question is no longer how much was spent. The question is what Nigeria has to show for it,” he added.

  
Former Vice President Atiku Abubakar also criticized the spending, saying Nigerians were told subsidy had ended in 2023 but NNPCL’s accounts show N7.13 trillion was still spent on what it called “energy security.”

“Nigerians were never told the whole truth. The subsidy was not eliminated; it was merely repackaged, renamed and quietly charged to the Federation,” Atiku said in a statement by his aide, Phrank Shaibu.

Former NACCIMA President, Dele Kelvin Oye, described the N17.5 trillion liability as “the most expensive subsidy programme in Nigeria’s history,” alleging it was subsidy by another name. He called for a forensic audit.

Energy law expert, Prof. Dayo Ayoade of the University of Lagos, said the term “energy security” needs clarification.  

“If energy security means protecting assets, ensuring fuel supply, or financing naira-for-crude, that’s one thing. If it means paying for government policy costs that cannot be itemized, then it becomes difficult to justify,” he said. He also asked whether NNPCL’s board approved the payments, warning of governance risks.

Petroleum economist, Prof. Wumi Iledare, said the spending deserves scrutiny but noted NNPCL is now a limited liability company governed by a board.  

“Energy security is not limited to protecting oil and gas assets; it includes ensuring availability, accessibility, affordability, and adaptability of energy supplies. The key issue is whether the expenditure was appropriately classified, transparently disclosed, economically justified and delivered measurable value,” he said.