FG’s revenue shortfall from oil sector hits $6.1bn – NEITI
Onome Amuge
The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that operators in Nigeria’s oil and gas sector have amassed $6.1 billion in unpaid debts to the federal government as of August 2024, comprising outstanding royalties, taxes, rents, and other revenues that should have been collected into government coffers.
Dwelling on this, NEITI has advised the government to pursue swift recovery of the unpaid liabilities within the oil and gas industry, with the aim of shoring up revenue for the 2025 budget.
Ogbonnaya Orji, the executive secretary of NEITI, stated this while interacting with the Senate Committee on Public Accounts on its industry reports for the oil, gas, and mining sectors covering years 2021, 2022, and 2023.
Orji, speaking through Obiageli Onuorah, NEITI’s director of communications and stakeholder management, stated, “A total sum of $6.1bn as outstanding liabilities owned by the oil and gas industry to the federation as of August 2024. These are made up of outstanding royalties, taxes, rents, and other collectible revenues due to be collected into government coffers.
“At a time when the country is mobilising resources to meet its budget expenditures, recovering these revenues by the relevant agencies will be a huge relief to the government.”
The NEITI report for the oil and gas sector in 2023 disclosed a significant reduction in crude oil losses by 78 percent compared to the previous year.
NEITI’s findings also indicated that Nigeria lost 36.6 million barrels of crude oil in 2022, but this figure was lowered to 7.68 million barrels in 2023.
The report showed that Nigeria imported only 20.28 billion litres of fuel in 2023, down from the previous year’s figure of 23.54 billion litres. The decrease was attributed to the removal of subsidies, suggesting that the policy has made a positive impact on the country’s fuel import dependence, despite the initial backlash it received.
While the NEITI reports displayed signs of progress in some areas of the oil and gas sector, they also revealed a worrying trend of declining revenues. In particular, the reports showed that the total revenue generated by the sector decreased by 13.7 percent from $35.78 billion in 2022 to $30.86 billion in 2023.
Meanwhile, cumulative revenues from the sector over a 25-year period spanning from 1999 to 2023 amounted to $831.14 billion
Orji commended the Office of the National Security Adviser, the Armed Forces, and security agencies for their collaborative efforts in formulating and implementing policies that helped reduce crude oil theft, including increased surveillance of the country’s pipelines.
He also emphasised the importance of securing the support and participation of host communities in the fight against oil theft, adding that their involvement could help curb the menace and strengthen the oil industry’s overall security.
Addressing the repercussions of indiscriminate layoffs in the oil and gas industry, the NEITI executive secretary underscored the danger of dismissing skilled workers without due consideration.
Highlighting the risk, he noted that these workers, lacking viable alternatives and possessing specialised technical knowledge, might be driven to vandalize oil and gas infrastructure to sustain themselves, creating a threat to the industry’s operations and security.