Nigeria’s fuel subsidy debate has resurfaced after NNPCL’s 2024 accounts revealed N7.13tn in energy security expenses and N17.5tn owed by the government
The long-running controversy over Nigeria’s fuel subsidy regime has resurfaced after details contained in the Nigerian National Petroleum Company Limited’s (NNPCL) audited 2024 financial statements triggered fresh questions about whether petrol subsidies were actually eliminated following President Bola Ahmed Tinubu’s declaration in May 2023.
The latest development has renewed public debate over the government’s claim that the subsidy regime had been discontinued, particularly after reports revealed that NNPCL recorded approximately N7.13 trillion as an Energy Security Expense in its 2024 financial accounts.
The issue gained further attention after Arise Television anchor, Oseni Rufai, raised questions about the figures in a post on X, suggesting that the latest financial disclosures could indicate that Nigerians were not given the full picture about the status of fuel subsidy payments.
Rufai wrote that NNPCL made fuel subsidy-related payments in 2024 despite earlier assurances that the controversial policy had been scrapped.
His comments generated significant reactions online, with many Nigerians demanding greater transparency from the government and the national oil company over the actual financial arrangements surrounding petrol pricing.
The controversy was further fuelled by comments from economist and Chairman of the Alliance for Economic Research and Ethics Ltd/GTE, Dele Oye, who argued that Nigeria may still be operating a form of fuel subsidy, although it is now being managed through a different financial structure.
Oye, a former President of the Organised Private Sector of Nigeria (OPSN), linked the development to the N17.5 trillion debt reportedly owed by the Federal Government to NNPCL.
According to him, the liability, which includes energy security expenses, under-recovery and other receivables, represents a continuation of the subsidy system under alternative accounting descriptions.
He maintained that while President Tinubu announced the removal of petrol subsidy on May 29, 2023, the financial obligations connected to the policy did not disappear.
Instead, he argued, the costs were transferred into different accounting categories, making it more difficult for members of the public to clearly understand the scale of government spending on fuel price support.
Oye described the situation as a costly arrangement whose true nature has been obscured by technical financial terminology.
“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,” he said.
The economist also questioned the compatibility of the arrangement with the objectives of the Petroleum Industry Act (PIA) 2021, which was introduced to promote transparency, accountability, efficiency and commercially driven operations within Nigeria’s oil and gas industry.
According to Oye, figures contained in NNPCL’s 2024 Consolidated and Separate Financial Statements showed that the financial obligations of the federation to the national oil company had risen significantly.
He said the amount increased from about N9.36 trillion recorded in 2023 to approximately N17.5 trillion in 2024, raising concerns about the sustainability and transparency of the financial relationship between the Federal Government and NNPCL.
Oye also drew attention to NNPCL’s reported financial performance during the period under review.
He questioned how the company could record a profit after tax of about N5.4 trillion in 2024, representing a 64 per cent increase compared with the previous year, while simultaneously carrying substantial receivables from the federation.
Beyond the subsidy controversy, the economist raised concerns about Nigeria’s continued dependence on imported petrol despite the commencement of operations at the Dangote Petroleum Refinery.
He argued that the developments surrounding fuel imports, domestic refining capacity and petrol pricing showed the need for greater clarity regarding the structure of Nigeria’s petroleum market.
Oye consequently called for a comprehensive forensic audit of all energy security expenses, under-recovery claims and related receivables involving the Federal Government and NNPCL.
He said such an investigation would enable Nigerians to understand the true nature of the financial obligations being accumulated on their behalf and determine whether the country’s subsidy regime had genuinely ended or merely been restructured.
However, the Federal Government’s position on the removal of fuel subsidy remains that the policy was a necessary and far-reaching economic reform that has significantly improved the country’s fiscal position.
Senate President Godswill Akpabio recently defended President Tinubu’s decision to end the subsidy, describing it as a courageous move that helped prevent Nigeria from sliding further into fiscal crisis.
Akpabio spoke at the Federal Capital Territory Infrastructure Commissioning Dinner in Abuja, where he represented President Tinubu.
According to the Senate President, the President inherited an economy facing serious financial challenges and was compelled to take difficult decisions to reverse years of economic pressure.
He argued that the removal of the subsidy eliminated a huge financial burden on the government and created additional fiscal space for states to fund infrastructure, pay salaries and undertake development projects.
Akpabio claimed that a significant portion of Nigeria’s revenue had previously been consumed by fuel subsidy payments, leaving little money available for other essential government responsibilities.
“When we came here, about 87 per cent of the country’s revenue was being used for fuel subsidies, and all that is gone, just because of one man who felt that it is better for Nigeria to survive,” he said.
The Senate President further argued that the reform had strengthened the financial position of state governments and reduced their dependence on federal bailouts and borrowing.
He said several states were now capable of financing projects and meeting salary obligations without taking loans from commercial banks.
“Many states are not taking loans from any bank now to execute projects, and no state is taking loans to pay salaries. This was not the case before. There was a time in this country when even teachers in primary schools were owed salaries for more than one year,” Akpabio said.
While the government continues to defend the subsidy removal as a critical step toward rebuilding Nigeria’s economy, the latest debate over NNPCL’s financial statements has raised fresh questions about the mechanisms being used to manage fuel pricing and energy security expenses.
Adding to the concerns surrounding petrol prices, NNPCL has also increased the pump price of Premium Motor Spirit (PMS), commonly known as petrol, to N1,270 per litre at its retail outlets in Abuja and surrounding areas.
The latest price adjustment is expected to further intensify public discussions about the cost of petrol, the impact of subsidy removal on Nigerians and the broader financial arrangements between the Federal Government and NNPCL.
As the debate continues, calls for greater transparency and an independent review of the financial transactions surrounding fuel pricing are likely to remain a major part of Nigeria’s economic discourse.
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