NNPC employee benefits expenses surged 118.7% in 2023

The Nigerian National Petroleum Corporation (NNPC) reported that its short-term employee benefits expenses surged by 118.7 per cent in 2023, reaching N583.8 billion compared to N266.9 million in 2022.

This significant increase primarily stemmed from the growth in various components of employee benefits, all contained in its recently released 2023 audited financial statements.

Employee benefits expenses accounted for almost 20 per cent of general and administrative expenses, the biggest expense after exchange loss.

According to the statement, the benefits included salaries and wages which jumped to N226.8 billion in 2023 from N73.6 billion the previous year.

NNPC did not provide the reason for the 208.2 per cent increase and no mention was made of the total number of staff or any potential recruitment activities during that period.

Salaries and wages increased from N73.7 billion in 2022 to N226.9 billion in 2023. Also, staff allowances moved up from N58.2 billion to N179.8 billion while staff welfare expenses increased from N36.8 billion to N77.1 billion in the years under review.

An increase in these three components drove up the short-term employee benefits.

NNPC long-term employee benefits, which included long service awards and re-measurement loss/(gain) increased from N226 million in 2022 to N16.6 billion in 2023.

The main reason for the huge increase is the increase recorded in long service awards from N462 million to N15.8 billion.

For NNPC post-employment benefits, the financial report revealed a decrease in the sum from N97.9 billion in 2022 to N83.3 billion in 2023.

This figure comprises the gratuity charge, which stood at N78.4 billion, and post-employment medical benefits, which stood at N5.3 billion in the year under review.

The main factor for this decrease is that pension costs dropped significantly by 86.8 per cent to N1.8 billion.