By Ayomide Otitoju
The cost of running the Nigerian National Petroleum Company Limited (NNPC) rose sharply in 2024, with directors’ fees and expenses climbing to N4.096 billion, while total spending on employee benefits surged to N749.7 billion, according to the company’s audited 2024 annual report.
An analysis of the report by The PUNCH on Thursday showed that directors’ fees and reimbursable expenses increased by 58 per cent from N2.593 billion in 2023, and by 214 per cent from N824 million in 2022. The report noted that the 11 board members served throughout the year without changes, contributing to higher board costs.
The board was chaired by Chief Dr. Pius O. Akinyelure, with Mallam Mele Kolo Kyari as Group Chief Executive Officer. Other key directors included Alhaji Umar Isa Ajiya (Group CFO until November 2024), Mr. Adedapo Segun (appointed CFO later in the year), and non-executive members Amb. Nicholas Agbo Ella, Mr. Okokon Ekanem Udo, Mr. Ledum Mitee, Mr. Musa Tumsah, Dr. Ibraheem Ghali-Mohammed, Prof. Almustapha Aliyu, Mr. David Ogbodo, and Mrs. Eunice Thomas. Many directors’ tenures ended on April 2, 2025, when President Bola Tinubu dissolved the board and appointed new leadership.
Despite rising board expenses, total compensation for NNPC’s key management personnel fell slightly in 2024. Short-term employee benefits increased to N985 million from N818 million in 2023, while post-employment pension and medical benefits declined to N380 million from N631 million. Overall, total compensation for key executives stood at N1.365 billion, down from N1.449 billion in 2023.
The report highlighted zero staff resignations across all age brackets for the second consecutive year, a trend linked to improved welfare packages and rising staff-related expenditure. Total employee benefit costs at the group level rose to N749.7 billion from N581.8 billion in 2023, including N272.7 billion on salaries, N79.1 billion on allowances, N40.5 billion on welfare, N44 billion on pensions, and N84.4 billion on gratuities. Post-employment medical and long-term benefits were recorded at N3.3 billion and N4.4 billion, respectively.
At the company level, employee benefits stood at N192.3 billion, while staff mortality assumptions remained stable, with deaths per 10,000 employees aligning with actuarial expectations. The zero-resignation trend underscores the strength of NNPC’s compensation and welfare framework since its commercialisation under the Petroleum Industry Act in 2021.
General and administrative expenses at the group level rose sharply to N3.58 trillion in 2024, from N2.09 trillion in 2023, while company-level expenses climbed to N1.66 trillion from N994.08 billion. Major drivers of the increase included employee benefits, depreciation of property and equipment, and rising professional and consultancy fees, which jumped to N699.67 billion at the group level from N184.2 billion in 2023.
Other cost lines also rose significantly, including software licences (N210.06 billion), security (N271.37 billion), transport and travel (N91.55 billion), training and recruitment (N90.39 billion), and entertainment (N30.34 billion). Spending on local community development increased to N29.89 billion, while disbursements under the Host Community Development Fund reached N27.76 billion. Fuel and lubricants expenses stood at N27.4 billion, and fines and penalties amounted to N118.78 billion, an item not recorded in 2023.
Despite these increases, some costs fell sharply, with other expenses declining to N146.87 billion at the group level from N563.74 billion the previous year, indicating possible reclassification or cost controls.
The sharp rise in directors’ fees, employee benefits, and general administrative expenses is expected to fuel renewed public debate over cost efficiency, transparency, and value for money at the national oil company, particularly amid economic pressures, the removal of fuel subsidies, and ongoing fiscal reforms.
