The Nigerian National Petroleum Corporation (NNPC) has reported a net profit of ₦7.2 trillion for 2025, representing a 33% increase from the previous year. Despite this impressive growth, the corporation's financial statements reveal a complex picture of its performance. The NNPC's financial report, audited by PwC, shows a significant increase in profit, but this growth is largely attributed to a ₦5 trillion rise in "other income" and a ₦1 trillion fall in general and administrative expenses.
A closer look at the NNPC's financials reveals that revenue from operations dropped by 23% to ₦34.5 trillion in 2025, down from ₦45.1 trillion in 2024. Gross profit also declined by a similar percentage to ₦9.4 trillion. The corporation's balance sheet shows a current ratio of 0.85, indicating that its short-term assets (₦28.1 trillion) do not fully cover its short-term liabilities (₦33.2 trillion). This has raised concerns about the NNPC's ability to meet its financial obligations.
The NNPC's cash balance also declined from ₦10.3 trillion in 2024 to ₦6.4 trillion by the end of 2025, despite an increase in cash generated from operations to ₦12.9 trillion. The corporation's trade and other receivables fell from ₦31.4 trillion in 2024 to ₦19.7 trillion in 2025, but remain substantial. These figures suggest that the NNPC is still under significant cash pressure.
On a positive note, the NNPC's production has shown a significant recovery. The corporation reported an average crude and condensate production of 1.77 million barrels per day, a five-year high. However, there appears to be a discrepancy in the reporting of production figures, with the financial highlights listing 565.8 million barrels of crude oil production, which translates to approximately 1.55 million barrels per day.
The NNPC's financial statements continue to use categories such as "energy security" and "under-recovery," which have sparked concerns about the corporation's accounting for fuel subsidies. The 2024 financial statement reports ₦8.67 trillion as an "under-recovery" balance, while the 2025 statement describes the same amount as a "federation receivable." This has led to questions about whether the federal government has truly removed fuel subsidies.
The use of different labels and reporting periods has created confusion about the true extent of the fuel subsidy burden. If the corporation continues to cover the gap between petrol's supply cost and the managed selling price, and records it as recoverable from the federation, the economic burden from the fuel subsidy has not disappeared. Instead, it has been absorbed by the NNPC or the federation, rather than being fully passed on to consumers.
The NNPC's annual report has been hailed as a step forward in terms of accountability and public disclosure. However, significant parts of the picture of a profitable company underpinned by improving production remain out of focus. The report's headline profit growth figure may overstate the improvement in the corporation's underlying trading performance, and the sustainability of the "other income" performance is uncertain.
Key points
- The NNPC's profit growth is largely attributed to "other income" and reduced expenses, rather than increased sales or gross profits.
- The corporation's financial statements continue to use conflicting labels for fuel subsidies, sparking concerns about transparency.
- The NNPC's cash pressure and balance sheet structure raise questions about its ability to meet financial obligations.
