NNPC cuts customer debts by N11.7tn, reduces unpaid bills

Efforts by the Nigerian National Petroleum Company Limited to recover debts owed by customers reduced its group trade and other receivables by N11.66tn in 2025, while trade and other payables fell by N10.18tn, according to an analysis of its 2025 audited financial statements.

The reductions came as the national oil company intensified efforts to recover outstanding debts from customers who received crude oil and gas but had yet to pay, a move its management identified as one of the factors supporting its improved profitability during the year.

The PUNCH reports that trade receivables are amounts owed to a company by customers for goods supplied or services rendered but not yet paid for.

In NNPC’s case, they may include outstanding payments for crude oil, natural gas, and other petroleum products supplied to customers. Trade payables, on the other hand, are amounts a company owes its suppliers and other creditors for goods and services received but not yet paid for.

These may include payments due to contractors, suppliers and other business partners. While a reduction in receivables could indicate improved debt recovery, a fall in payables could reflect payments made to creditors or other adjustments to outstanding obligations.

An analysis of the audited accounts showed that the group’s trade and other receivables declined by 37.2 per cent to N19.71tn as of December 31, 2025, from N31.37tn in 2024. The balance fell by N11.66tn during the period.

Similarly, trade and other payables at the group level dropped by 31.5 per cent to N22.16tn from N32.34tn in the preceding year, representing a reduction of N10.18tn.

The movements indicate a substantial reduction in both amounts owed to NNPC and the company’s outstanding payment obligations.

However, the decline in receivables alone does not establish how much cash was recovered, as changes in balances can also result from write-offs, impairments, settlements and reclassifications.

At the company level, the reduction was even more pronounced. Trade and other receivables fell by 56.1 per cent to N22.02tn in 2025 from N50.14tn in 2024, representing a decline of N28.13tn.

The company’s trade and other payables also dropped by 65.8 per cent to N11.86tn from N34.73tn, a decrease of N22.87tn. The company-level figures differ from the group figures because the two sets of accounts present different reporting scopes. The balances should therefore be considered separately rather than added together.

The reductions in receivables and payables come against the backdrop of NNPC’s improved financial performance in 2025, when its profit after tax rose by 33 per cent to N7.2tn from N5.4tn in 2024, despite a 24 per cent decline in revenue to N34.5tn.

NNPC management attributed the revenue decline mainly to lower international crude oil prices and reduced white-product volumes following the deregulation of the domestic petroleum market.

Explaining the improvement in profitability at a recent media parley, NNPC Group Chief Executive Officer, Bayo Ojulari, said the company had stepped up its efforts to recover money owed by customers who had received crude oil and gas supplies.

He explained that the company could no longer depend on routine Federal Government budgetary allocations following its transition into a commercially oriented entity under the Petroleum Industry Act.

Ojulari said the company had become more deliberate in pursuing outstanding payments, including by engaging the management of indebted companies and reviewing recovery progress monthly.

He added that the company was reviewing debt recovery monthly and engaging the heads of companies and other entities that owed it money.

“Before the PIA, we used to get the federal government’s allocation of budget to NNPC. As with many other ministries, at the end of every year, you do your returns. Once it’s signed off, that year is gone, right? And then you open the new year; whatever budget level is approved, you work on it. What the PIA has done is good, but it comes with its own challenges. We no longer have anywhere to run to.

“So there are people who owe us. Receivables are people who owe us money. If you don’t have any father, no mother, we have gone after those who owe you. Otherwise, what are you going to survive on? So in all honesty, we have to go back and be very focused on following through everyone that owns NNPC in Naira.

“We have structured it; whether it’s gas, a lot of people who have received gas have not paid. The gas team will go after them. Some people who are taking crude have not paid. We go after them more than ever before. And we review it every month to see the progress and where there are problems. I have meetings with the heads of those parastatals or companies to discuss how our debts are going to be paid,” he said.

NNPC’s Chief Financial Officer, Adedapo Segun, also attributed the improved results to operational efficiency and cost discipline, noting that the company had reduced its general and administrative expenses by 25 per cent in 2025.

The debt recovery drive is significant because outstanding receivables can tie down funds that would otherwise be available to finance operations, maintain oil and gas infrastructure and support new investments. Recovering overdue payments can improve liquidity, while reversing provisions previously recognised against debts can also increase reported profit.

However, the audited figures provided for trade and other receivables and payables do not, by themselves, establish how much of the reductions represented cash collections or how much the recovery effort contributed to the N7.2tn profit.

The distinction is important as NNPC seeks to sustain its earnings growth and strengthen its commercial operations. Its 2025 results showed that profit increased even as revenue fell, highlighting the role of cost control and other financial and operational factors in its performance.

The company declared a dividend of N5.8tn for the year, up 35 per cent from the previous year, while operating cash flow increased by 16 per cent to N12.8tn. (Punch)