NNPC Subsidiaries’ Debt Skyrockets to N22 Trillion in 12 Months

Thirty-two subsidiaries of the Nigerian National Petroleum Company Ltd (NNPC) have accumulated a staggering N22 trillion debt in just one year, sparking concerns over their financial sustainability. This represents a 155% increase from N8.6 trillion in 2022.

The debtors, including refineries and joint venture partners, owe NNPC for various activities such as operational funding, expense back-charging, operating leases, and processing fees. NNPC claims these transactions are conducted at arm’s length terms, with outstanding balances being unsecured and interest-free.

Notably, the Port-Harcourt Refining Company Limited saw its debt escalate by 144% to N1.97 trillion, while Kaduna Refining and Petrochemical Company Limited and Warri Refining and Petrochemical Company Limited reported debt increases of 127.8% and 140%, respectively.

Experts question NNPC’s continued losses, idle refining machinery, and personnel costs amidst perennial losses. Despite producing no fuel and recording a N50.5 billion loss, the Port Harcourt refinery increased staff salaries and benefits to N22.2 billion in 2019.

A parliamentary report revealed Nigeria has spent over N11.35 trillion on fixing the country’s three refineries in the past decade, with NNPC investing nearly $3 billion in revamping the Port Harcourt, Warri, and Kaduna refineries.

Industry executives attribute the challenges to NNPC’s limited operational history, cultural inefficiencies, and lack of expertise in managing refinery revamp projects.

Other significant debtors include NNPC Gas Infrastructure Company Ltd (N1.86 trillion), Nigerian Pipelines and Storage Company Limited (N236.1 billion), and NNPC LNG Limited (N13.9 billion).

While some subsidiaries reduced their debts, others experienced substantial increases, raising concerns over NNPC’s financial management and viability.”