…Says Nigerian businesses spent N2trn on diesel in 2 months
By Clifford Ndujihe
The Chairman of the Alliance for Economic Research and Ethics LTD/GTE, Dele Oye, has criticised the Federal Government’s celebration of recent energy sector reforms, insisting that while official figures appear impressive, they do not reflect the economic hardship faced by ordinary Nigerians, who continue to grapple with high fuel costs, unreliable electricity, and rising production expenses.
Oye, who was responding to a 13-page report by the Office of the Special Adviser to the President on Energy titled “Nigeria’s Energy Sector Reforms: A Three-Year Review (2023–2026),” argued that the claims in the report do not reflect the lived realities of households and the productive sector.
He drew attention to what he described as a sharp deterioration in the financial position of the Nigerian National Petroleum Company Limited (NNPC Ltd), noting that its internal debt has risen by about 70 per cent to approximately N30.3 trillion. According to him, this raises serious concerns about efficiency, governance, and the sustainability of ongoing reforms in the energy value chain.
He said: “Audited financial statements for NNPC Limited’s 2024 fiscal year, released in early 2026, revealed that intra-company debts among NNPC subsidiaries surged by 70.4 per cent in a single year, from N17.78 trillion in 2023 to N30.3 trillion as of December 31, 2024.
“The biggest debtors are the state’s refineries: the Port Harcourt Refining Company owed N4.22 trillion; Kaduna Refining and Petrochemical Company owed N2.39 trillion; and Warri Refining and Petrochemical Company owed N2.06 trillion. These facilities have absorbed billions of dollars in rehabilitation spending yet remain largely non-functional.
“NNPC’s trading arm, NNPC Trading SA, owed the parent company N19.15 trillion, more than double the N8.57 trillion recorded the previous year. As Professor Wumi Iledare, Professor Emeritus of Petroleum Economics, observed: ‘A 70 per cent jump in one year is a clear warning sign. It means inefficiencies are growing faster than reforms.’”
Oye further argued that the government’s intervention in the oil sector raises concerns about fiscal discipline.
“In late December 2025, President Tinubu approved the cancellation of $1.42 billion and N5.57 trillion in legacy debts owed by NNPC to the Federation Account. For a government that preaches fiscal discipline, writing off trillions of naira in state oil company debts while ordinary Nigerians face crippling energy costs is a profound contradiction,” he said.
He also cited World Bank data alleging that NNPC remitted only N600 billion out of N 1.1 trillion in post-subsidy revenues to the Federation Account in 2024, describing it as a N500 billion shortfall.
Oye drew attention to the continued reliance of businesses on self-generated power, stating that Nigerian companies spent an estimated N1.83 trillion on diesel within just two months. He said this reflects the persistent failure of the power sector to provide reliable electricity for industrial and commercial use.
“The reality on the ground does not match the optimism being projected,” he said. “If businesses are spending trillions on diesel in such a short period while debt within the energy system continues to balloon, then the effectiveness of these reforms must be questioned.”
He added that rising operational costs are placing severe pressure on manufacturers, small businesses and households, many of whom remain dependent on generators due to unstable grid electricity.
The organisation called for a more transparent, data-driven assessment of energy sector performance, insisting that progress should be measured by real-world outcomes such as improved electricity supply, reduced reliance on diesel generation, and lower production costs.
Oye acknowledged that Nigeria’s upstream investment environment has improved but cautioned against conflating investment announcements with actual capital deployment.
“The report boasts of $10 billion in Final Investment Decisions (FIDs) and positions Nigeria as Africa’s number one destination for oil and gas investment, citing a rise in Nigeria’s share of African upstream FIDs from 4 per cent to 40 per cent in two years.
“There is a kernel of truth here. Nigeria’s upstream investment environment has improved, and ExxonMobil has indeed been moving toward a Final Investment Decision on approximately $10 billion in deep-water projects.
“However, a Final Investment Decision is not a cheque cleared; it is a corporate commitment to proceed. The gap between FID announcements and actual capital deployment remains significant,” he said.
He further cited a 2026 academic study which reportedly identified persistent governance gaps in the petroleum sector, including opacity in crude allocation, weak enforcement, regulatory overlap and crude oil theft, estimating losses at ¦ 8.41 trillion between 2021 and 2025.
According to Oye, Nigeria’s claim to be Africa’s top investment destination remains aspirational, insisting that sustained capital inflows require structural reforms and governance transparency.
He concluded that the “Three-Year Review” presents a selective narrative of progress rather than a balanced policy assessment.
“The report systematically overstates production achievements, presents partial interventions as transformative solutions, and ignores structural weaknesses in the energy sector,” he said.
Oye added that true energy reform must be measured not by policy pronouncements but by tangible outcomes such as electricity delivered, production efficiency and reduced dependence on generators.
He called for independent third-party verification of future government energy reports and urged the publication of raw production and financial data.
“Nigerians deserve not just a better energy sector, but an honest account of where it stands,” he said.
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