Nigeria's N17.5 Trillion NNPC Debt is Disguised Fuel Subsidy, Expert Claims

The N17.5 trillion debt owed by Nigeria's federal government to the Nigerian National Petroleum Company (NNPC) is not a measure for energy security but a disguised fuel subsidy, according to Dele Oye, Chairman of Alliance for Economic Research and Ethics Ltd/GTE.

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Nigeria is currently executing the most expensive subsidy programme in its history, yet almost no one is calling it by its true name.

Oye, the former President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), stated that Nigeria is currently operating the most expensive subsidy program in its history. He argued that the government's announcement of fuel subsidy removal in 2023 did not eliminate the financial burden but merely transformed it into an accounting arrangement that has strained public finances.

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A N17.5 trillion liability has been accumulated in the shadows, hidden behind accounting terminologies designed to obscure rather than illuminate.

"A N17.5 trillion liability has been accumulated in the shadows, hidden behind accounting terminologies designed to obscure rather than illuminate," Oye said in a statement. He criticized the use of terms like "energy security expenses" and "under-recovery," calling it "fiscal capture" and a "systematic transfer of public wealth through mechanisms that evade democratic oversight." Oye asserted that the Petroleum Industry Act was intended to dismantle such opaque structures, not legitimize them.

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This is not energy security; it is fiscal capture, the systematic transfer of public wealth through mechanisms that evade democratic oversight.

According to NNPC's 2024 financial statements, the federation's obligations to the company have surged to approximately N17.5 trillion. This figure includes N7.13 trillion categorized as "Energy Security Expense" and N8.67 trillion labeled as "under-recovery claims" and other receivables. This represents a significant increase from the N9.36 trillion recorded in 2023, raising serious concerns over transparency, accountability, and the long-term sustainability of Nigeria's petroleum policy.

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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.