Fuel Subsidy Disguise: FG's N17.5tn Debt to NNPC Under Scrutiny

The Chairman of Alliance for Economic Research and Ethics Ltd/GTE, Dele Oye, has expressed concerns over the N17.5 trillion debt owed to the Nigerian National Petroleum Company Limited (NNPC) by the federal government. According to Oye, this massive liability is, in fact, a fuel subsidy by another name. In a statement, the former President of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) noted that despite the government's claim of removing fuel subsidy in 2023, the country is still operating the most expensive subsidy programme in its history. Oye stated, 'Nigeria is currently executing the most expensive subsidy programme in its history, yet almost no one is calling it by its true name.' He pointed out that the huge debt, accumulated through 'energy security expenses,' 'under-recovery,' and other receivables, represents a continuation of the subsidy regime under a different name. The alliance chairman also noted that the government's 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. Oye said, 'A N17.5 trillion liability has been accumulated in the shadows, hidden behind accounting terminologies designed to obscure rather than illuminate.' He expressed concerns over transparency, accountability, and the sustainability of Nigeria's petroleum policy, given that NNPC's 2024 financial statements showed that the federation's obligations to the company had risen to about N17.5 trillion. Oye questioned the continued accumulation of the liability despite the passage of the Petroleum Industry Act (PIA) 2021, which was designed to promote transparency and commercial efficiency in the petroleum sector. He also criticised the continued reliance on petrol imports, despite the commissioning of Dangote Petroleum Refinery, describing it as a contradiction in Nigeria's quest for energy independence. Oye called for a comprehensive forensic audit of all energy security expenses and related claims, stating that Nigerians deserve clarity on the financial obligations being accumulated in their name.