Nigeria’s Oil and Gas Sector Owes Government Over $6 Billion, Says NEITI Report
Oil and Gas Sector Debts
The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that the federal government is owed $6.071 billion and N66.4 billion in unpaid revenues from the oil and gas sector as of June 2024. This was disclosed during the public presentation of NEITI’s 2022 and 2023 Independent Oil and Gas Industry Reports in Abuja. NEITI’s breakdown of the debts highlighted that $6.049 billion and N65.9 billion are owed in unpaid royalties and gas flare penalties to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as of August 31, 2024.
In addition to these outstanding revenues, the report also noted that $21.9 million and N492.8 million in petroleum profit taxes, company income taxes, withholding taxes, and value-added tax (VAT) were owed to the Federal Inland Revenue Service (FIRS) by June 2024.
Key Officials and Presentation
The report was jointly presented by top officials, including Ola Olukoyede, Chairperson of the Economic and Financial Crimes Commission (EFCC), and George Akume, Secretary to the Government of the Federation, along with other government representatives. The NEITI report is part of efforts to ensure transparency and accountability in Nigeria’s oil and gas sector, as it provides detailed insights into revenue leakages and debts owed to the government by oil and gas companies.
Petrol Importation and Fuel Subsidy Analysis
NEITI’s report also covered fuel importation trends, indicating that Nigeria imported 23.54 billion litres of petrol in 2022. However, this volume dropped to 20.28 billion litres in 2023, reflecting a 14% decrease equivalent to 3.25 billion litres. Over a 10-year period (2014–2023), the report revealed that 2022 saw the highest petrol imports at 23.54 billion litres, while the lowest was in 2017, at 16.88 billion litres.
Moreover, the report highlighted that between 2006 and 2023, a total of N15.87 trillion was spent on under-recovery and price differentials in the fuel subsidy regime. The highest expenditure on fuel subsidies occurred in 2022, with N4.714 trillion recorded.
Crude Oil Production Trends
In terms of crude oil production, the report showed that Nigeria produced 490.945 million barrels of fiscalised crude oil in 2022, an 11% decline from 556.130 million barrels in 2021. However, crude oil production increased by 9.5% in 2023, reaching 537.571 million barrels, an additional 46.626 million barrels compared to the previous year. NEITI’s 10-year trend analysis (2014–2023) indicated that 2014 had the highest crude oil production at 798.542 million barrels, while 2022 recorded the lowest at 490.945 million barrels.
Crude Oil Lifting and Losses
The NEITI report also detailed crude oil lifting data, showing that 482.074 million barrels were lifted in 2022, compared to 551.006 million barrels in 2021. In 2023, crude oil lifting rose by 11% to 534.159 million barrels, an increase of 58.08 million barrels compared to the previous year.
Regarding oil theft and crude losses, NEITI noted a significant reduction in crude oil theft, with 7.68 million barrels stolen or lost in 2023, representing a 79% decrease from the 36.69 million barrels lost in 2022.
Regulatory Framework and Reforms
The NEITI report also reviewed Nigeria’s oil and gas sector’s regulatory framework, covering legal and fiscal regimes, government roles, and recent reforms under the Petroleum Industry Act (PIA). The PIA aims to address the endemic corruption in the industry, streamline operations, and create a more transparent and accountable oil and gas sector in Nigeria.
The NEITI report serves as a critical resource for monitoring and ensuring the compliance of oil and gas companies with regulatory obligations, while also providing the government with insights to improve revenue collection and curb financial losses from unpaid taxes and royalties.
Social Media Reactions:
- @EnergyWatchNG: “NEITI reveals Nigeria is owed over $6 billion by oil and gas companies! This has to be a wake-up call for the government to take action.”
- @EcoVoiceAfrica: “Gas flaring penalties unpaid while oil communities suffer the consequences. NEITI calls for accountability. Time to act!”
- @NaijaEconomist: “Massive $6bn owed by oil and gas firms, while we continue to suffer from underfunded sectors. NEITI’s findings are troubling.”
- @PolicyAnalyst: “Oil theft drops by 79%, but unpaid royalties and taxes still a huge problem. NEITI report highlights the gaps.”
- @AfricanEnergyInsider: “How can companies owe so much in royalties and penalties? Time for Nigeria to enforce stricter measures in the oil and gas sector.”
- @GreenOilFuture: “Gas flaring penalties remain unpaid while climate impacts intensify. NEITI report highlights the urgent need for policy reform.”
- @CivicActionNG: “$6bn owed to FG by oil firms? The government needs to fix this revenue leakage to fund critical services.”
- @OilMarketsNow: “NEITI’s report shows the need for transparency and better enforcement in Nigeria’s oil and gas industry.
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