The cost of running the Nigerian National Petroleum Company Limited (NNPC) rose sharply in 2024, with payments to board members and staff welfare expenses recording major increases, according to the company’s audited annual report.
Findings from the report show that directors’ fees and reimbursable expenses climbed to about ₦4.1bn in 2024, representing a 58 per cent increase from the ₦2.59bn paid in 2023.
The figure also marks a steep rise compared to the ₦824m spent on directors in 2022, reflecting a sustained increase in governance costs over the past three years.
NNPC explained that the higher board expenses were linked to the stability of its leadership during the year, as all 11 directors served for the full financial period without changes.
The board was chaired by Chief Pius Akinyelure, with Mele Kyari as Group Chief Executive Officer. Several board members later exited in early 2025 following the dissolution of the board and the appointment of a new leadership by President Bola Tinubu.
Beyond board remuneration, staff-related spending also expanded significantly.
Total employee benefits at the Group level rose to nearly ₦750bn in 2024, up from about ₦582bn in the previous year. The spending covered salaries, allowances, pensions, gratuities, welfare packages and post-employment medical benefits.
A key highlight of the report is that NNPC recorded zero voluntary resignations for the second consecutive year. All staff exits in 2024 were due to statutory retirement, a trend the company linked to improved welfare conditions and enhanced compensation packages since its transition into a limited liability company under the Petroleum Industry Act.
While board expenses increased, total compensation paid to key management personnel dipped slightly. Payments to top executives fell to about ₦1.37bn in 2024 from ₦1.45bn in 2023, driven mainly by lower post-employment and pension benefit costs, despite an increase in short-term benefits.
The report also points to a sharp rise in general and administrative expenses. At the Group level, these costs jumped to ₦3.58tn in 2024, compared with ₦2.09tn recorded in 2023. Higher depreciation charges, rising consultancy and professional fees, increased security spending, and growing investment in software and training were identified as major cost drivers.
Professional and consultancy fees recorded one of the steepest increases, highlighting the company’s growing reliance on external advisory and technical services. Security expenses also climbed, reflecting ongoing challenges in protecting oil and gas infrastructure across the country.
The rising cost profile is expected to attract stronger public scrutiny, especially amid economic pressures, the impact of fuel subsidy removal, and growing debate over cost efficiency at the national oil company.
While supporters of NNPC’s commercialisation argue that competitive remuneration is necessary to attract and retain skilled professionals, critics say the scale of administrative and board spending raises concerns about value for money at a time when many Nigerians are grappling with economic hardship.
