There have been questions over the expenditure of N7.13 trillion by the Nigerian National Petroleum Company Limited (NNPCL) on energy security in 2024.
The figure was contained in the NNPCL’s 2024 audit report which was released in November 2025.
Although the company did not specifically explain what the money was meant for, experts said it could be for fuel subsidy payment or protection of gas pipelines.
Amid the controversy, the NNPCL has kept mum. Its Chief Corporate Communications Officer, Andy Odeh, did not respond to phone calls and a message sent to his mobile telephone line yesterday by Daily Trust.
The NNPCL’s audit report, which termed the funds as Under Recovery/Energy Security Expense, stated, ‘In line with Section 64(M) of the Petroleum Industry Act (PIA) 2021, the cost incurred by NNPC Limited (Group) as the energy supplier of last resort for energy security reasons, and all associated cost shall be on the account of the Federation.’
The report also said the government instructed that NNPCL could not sell its Premium Motor Spirit (PMS) above a certain regulated price, but the cost of importing this PMS is usually much higher than this regulated price.
‘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.’
It added that PMS cost under recovery is recognised where there is reasonable assurance that it will be received and all attached conditions has been complied with.
‘When it relates to an expense item, they are deducted in reporting the related expense in cost of sales.’
Thus, it said the money the federal government is owing it due to its interventions in energy stability during the year amounted to N17.512 trillion.
It listed the debt as ‘energy security cost’ which amounted to N8.67 trillion and ‘other receivables from federation’ at N8.840 trillion.
It explained that the security cost during the year (2024) was made up of energy security expense of N7.1 trillion and N4.8 trillion for 2023.
‘The energy security expense arises when there is differential between the exchange rates (the Modulation factor) used to freeze the Premium Motor Spirit (PMS) Ex-coastal Price and the prevailing exchange rate at the point of import settlement. The amount is receivable to the Group as they are defrayed and charged against amounts due to the Federation in line with the provision of Section 64(m) of the Petroleum Industry Act of 2021,’ it explained.
The report also disclosed that other receivables relate to advance payment to the federation and the security costs incurred in protecting the oil and gas assets.
According to the report, this is under the framework of approval between the Government of Nigeria and the Group to incur security costs and charge same to the Federation.
ADC demands accountability
The African Democratic Congress (ADC) has called on President Bola Ahmed Tinubu, the NNPCL and the National Assembly to publicly account for trillions of naira reportedly spent on energy security, questioning what Nigeria has gained from the expenditure.
The opposition party made the demand in a statement issued on Monday by its National Publicity Secretary, Bolaji Abdullahi, while reacting to figures contained in the recently audited financial accounts of NNPCL for the 2024 financial year.
According to Abdullahi, the audited accounts showed that N7.13 trillion was recorded under ‘Energy Security’ in 2024, a figure he claimed rose to about N17.5 trillion when other fuel-related costs and receivables reflected in the accounts are included.
According to him, the scale of the expenditure raises serious questions that deserve immediate public explanation.
‘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. When other fuel-related costs and receivables reflected in the accounts are taken into consideration, the amount rises to about N17.5 trillion,’ Abdullahi said.
He said while safeguarding Nigeria’s oil and gas infrastructure remains a legitimate national priority, spending under the guise of security should not be shielded from public scrutiny.
‘The bigger the bill, the stronger the obligation to explain it,’ he added.
The party also referenced public reports identifying Tantita Security Services Nigeria Ltd, a company linked to former Niger Delta militant leader, Government Ekpemupolo, popularly known as Tompolo, as a major beneficiary of pipeline surveillance contracts.
It alleged that Tompolo had recently emerged as a prominent supporter of President Tinubu’s re-election campaign, arguing that the development makes transparency over the contracts even more necessary.
According to the ADC, Nigerians deserve to know whether public funds allocated for pipeline protection are being used strictly for national security purposes or whether they have become intertwined with political activities.
The party, therefore, demanded details of all energy security and pipeline surveillance contracts awarded since Tinubu assumed office in May 2023.
‘In this regard, Nigerians are entitled to know how much has been spent on pipeline surveillance and energy security since President Bola Tinubu came into office in May 2023, who received the contracts, how much was paid, what results were achieved, and whether any independent value-for-money assessment was carried out,’ Abdullahi stated.
Abdullahi said the questions had become even more urgent at a time many Nigerians are struggling with rising food prices, transport costs, electricity tariffs and unemployment.
‘The ADC consequently urged President Tinubu, the management and board of NNPC Ltd., as well as the relevant committees of the National Assembly, to immediately publish the full details of the energy security expenditure.
‘The question is no longer how much was spent. The question is what Nigeria has to show for it,’ the statement concluded.
You can’t build prosperity on deception – Atiku
Also, a former vice president and presidential candidate of the ADC, Atiku Abubakar, has criticised the economic reform of President Tinubu.
He alleged that ‘the bankruptcy of the administration’s so-called reforms was more than the fuel subsidy deception’.
He said Nigerians were told in 2023 that the subsidy was gone and were compelled to endure unprecedented hardship-skyrocketing fuel prices, crushing transportation costs, runaway inflation and a collapsing standard of living-in the name of economic reform.
‘Yet NNPC Limited’s own audited 2024 financial statements reveal that a staggering N7.13 trillion was still expended on what it describes as ‘Energy Security Expenses,’ a category the company itself identifies as petrol subsidy, otherwise known as under-recovery.
‘This means Nigerians were never told the whole truth. The subsidy was not eliminated; it was merely repackaged, renamed and quietly charged to the Federation. A government that conceals N7.13 trillion behind a convenient euphemism while demanding sacrifice from millions of struggling citizens cannot claim the moral authority to preach reform, prudence or fiscal discipline.
‘Nigerians deserve to know who authorised this expenditure, who benefited from it, and why the administration chose to market deception as economic reform.’
According to Atiku, the pattern demonstrates that the problem is no longer one of isolated errors but a systemic breakdown in budget discipline.
In a statement by his Senior Special Assistant on Public Communication, Phrank Shaibu, Atiku said the two independent reports had stripped away the propaganda surrounding the administration’s economic reforms and revealed what he described as a painful truth: that Nigeria is not failing because of a lack of resources, but because of a profound failure of leadership.
‘For more than three years, Nigerians have been subjected to relentless hardship. They were told that fuel subsidy removal, exchange rate unification, higher taxes and rising tariffs were bitter pills that would eventually restore economic stability. Yet today, the same government cannot explain how more than N210 billion found its way into duplicated and overlapping budget provisions.
‘When a government asks its people to sacrifice, it must first demonstrate discipline. Instead, what Nigerians have seen is a budget riddled with duplication, questionable insertions, overlapping projects and expenditures that offend both common sense and fiscal responsibility.’
‘N17.5trn NNPCL debt is fuel subsidy in disguise’
Commenting on the matter, a former chairman of the Organized Private Sector of Nigeria (OPSN) and 22nd president of the Nigerian Association of Chambers of Commerce Industry Mines and Agriculture (NACCIMA), Dele Kelvin Oye, alleged that the N17.5 trillion debt is a disguised fuel subsidy.
He said Nigeria is currently operating the most expensive subsidy programme in its history despite the government’s claimed removal of the subsidy.
Oye, in a statement, said the huge liability, accumulated through what NNPC describes as ‘energy security expenses,’ ‘under-recovery’ and other receivables, represents a continuation of the subsidy regime under a different name.
He said the government’s 2023 announcement of fuel subsidy removal did not eliminate the financial burden but merely transformed it into an accounting arrangement that has placed additional pressure on public finances.
He said: ‘Nigeria is currently executing the most expensive subsidy program 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.
‘This is not energy security; it is fiscal capture, the systematic transfer of public wealth through mechanisms that evade democratic oversight. The Petroleum Industry Act was designed to dismantle such opaque structures, not to be weaponized to legitimize them.
‘Three years after the declaration that ‘subsidy is gone,’ the burden has never been heavier. It has merely been rebranded. And that, tragically, is the most expensive word game in Nigerian history.’
According to him, NNPC’s 2024 financial statements showed that the Federation’s obligations to the company had risen to about N17.5 trillion, comprising energy security expenses, under-recovery claims and other receivables, noting that the development raises concerns over transparency, accountability and the sustainability of Nigeria’s petroleum policy.
‘The subsidy did not vanish; it metamorphosed. Today, the Federation owes NNPC a staggering N17.5 trillion, an exposure nearly double the N9.36 trillion recorded in 2023. The anatomy of this colossal liability is as stark as it is revealing: N7.13 trillion categorized as ‘Energy Security Expense’, N8.67 trillion labeled as ‘Under-Recovery’ and N8.84 trillion grouped under ‘Other Receivables from the Federation’.
He called for a comprehensive forensic audit of all energy security expenses and related claims, arguing that Nigerians deserve clarity on the financial obligations being accumulated in their name.
Prof. Dayo Ayoade, an energy law expert at the University of Lagos, said: ‘Now, what do we mean by energy security? I think that is part of the problem, you need to tell us what exactly energy security includes; if it means ensuring fuel supply to the country, maintaining our petrol infrastructure, protecting our oil and gas assets or involve financing Naira for crude, is that part of the energy security? That’s part of it.
‘So, these are the things that we need to look at. Then, on the other hand, if energy security is them paying for all sorts of government policy costs that cannot be itemized, or implicit subsidies, then that could become more difficult to justify. Then the other issue as a lawyer I would ask is that, did the NNPC board authorize all these payments by themselves? Because this could now become problematic, because if they are spending the money and approving the money, that means there are no checks and balances. In other words, we are back to subsidies without subsidies. That’s a particularly difficult governance issue for the Nigerian government to look into.’
‘So, we have to be very careful so that we don’t use energy security in quotes to defeat the explanation that is required about the commercial basis of this expenditure. NNPCL controls those costs, and the governance protocols that were implemented to safeguard public money because the public has a right to know as to whether the monies we are talking about are capital expenditures or operating expenditures. If it was capital expenditures, what are the projects involved, what is the benefit to the country of those projects, both commercial and in addition to energy security.’
On his part, a renowned professor of petroleum economics, Wumi Iledare, said the concerns raised over the energy security in NNPCL’s 2024 audited financial statements deserve objective attention.
He, however, said it is important to distinguish between corporate governance and public finance, stating that the NNPCL is a limited liability company governed by its Board of Directors.
‘The reported expenditure is a corporate expense, and the Board has the fiduciary responsibility to ensure it is justified, properly disclosed, and consistent with the company’s strategic objectives. The tax authorities also have the statutory mandate to examine the legitimacy and tax treatment of such expenditures where necessary.’
‘Nevertheless, N7.1 trillion is a significant amount, especially in the post-fuel subsidy era. It therefore deserves a clear professional explanation. Energy security is not limited to protecting oil and gas assets; it includes ensuring the availability, accessibility, affordability, and adaptability of energy supplies. Achieving these objectives often requires substantial investments in infrastructure protection, surveillance, technology, emergency response, and supply chain resilience.’
According to him, the key issue is not whether the NNPCL spent money on energy security, but whether the expenditure was appropriately classified, transparently disclosed, economically justified and delivered measurable value.