…Says Nigeria Running Costliest Subsidy Programme in History Despite ‘Removal’
The Chairman of the Alliance for Economic Research and Ethics Ltd/GTE, Mr Dele Oye, has described the Federal Government’s reported ₦17.5 trillion debt to the Nigerian National Petroleum Company Limited (NNPC) as a disguised fuel subsidy, insisting that Nigeria is currently operating the most expensive subsidy programme in its history despite the government’s declaration that fuel subsidy had been removed.
Oye, who is the immediate past President of the Organised Private Sector of Nigeria (OPSN), said the massive liability, which NNPC classifies as “energy security expenses”, “under recovery” and other receivables, represents the continuation of the subsidy regime under a different name.
In a statement, he argued that the Federal Government’s announcement on May 29, 2023, that fuel subsidy had ended did not eliminate the fiscal burden but merely changed its accounting description, leaving taxpayers to shoulder an even greater financial obligation.
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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 said.
“A ₦17.5 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 weaponised to legitimise 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 audited financial statements showed that the Federation’s obligations to the national oil company had risen to approximately ₦17.5 trillion, nearly doubling from the ₦9.36 trillion recorded in 2023.
He said the debt comprises about ₦7.13 trillion classified as energy security expenses, ₦8.67 trillion as under recovery claims and ₦8.84 trillion recorded as other receivables from the Federation.
Oye noted that while NNPC announced a record profit after tax of ₦5.4 trillion in 2024, representing a 64 per cent increase over the previous year, the company simultaneously carried almost ₦18 trillion in receivables from the Federal Government.
“NNPC insists this is not a subsidy. They call it ‘energy security’. But the burden ultimately falls on Nigerians while the accounting language changes,” he said.
He argued that the arrangement effectively reduces government revenue through deductions from NNPC remittances while Nigerians continue to pay high prices for petrol.
The economist also questioned why such liabilities continue to accumulate despite the Petroleum Industry Act, 2021, which was enacted to improve transparency, accountability and commercial efficiency in the petroleum sector.
Oye further criticised Nigeria’s continued dependence on imported petroleum products despite the commissioning of the Dangote Petroleum Refinery, describing the situation as a contradiction of the country’s energy security objectives.
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“The narrative becomes truly surreal when we consider the Dangote Petroleum Refinery,” he said.
“Commissioned to end Nigeria’s decades-long dependence on imported fuel and save precious foreign exchange, Africa’s largest refinery should have rendered the so called energy security expense entirely unnecessary.
“Instead, Nigeria finds itself embroiled in a crisis over whether the Dangote Refinery should even be allowed to effectively supply the domestic market.”
He called on the Federal Government to conduct a comprehensive forensic audit of all energy security expenses, under recovery claims and related receivables, saying Nigerians deserve full disclosure of the liabilities being accumulated on their behalf.
Oye also urged the government to prioritise domestic refining by ensuring adequate crude oil supply to local refineries and establishing a transparent petroleum pricing framework capable of eliminating hidden subsidy arrangements while strengthening fiscal sustainability.
