Oil & Gas Sector Owes FGN Over $6 Billion, N66 Billion
The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that the oil and gas industry owes the Federal Government more than $6.071 billion and N66.4 billion as of June 2024. This figure was released in NEITI’s 2022 and 2023 Independent Oil and Gas Industry Report, presented today in Abuja. The breakdown shows $6.049 billion and N65.9 billion in unpaid royalties and gas flare penalties, which are collectible revenues for the Nigerian Upstream Petroleum Regulatory Commission by August 31, 2024. Additionally, $21.926 million and N492.8 million in petroleum profit taxes, company income taxes, withholding taxes, and VAT are owed to the Federal Inland Revenue Service.
The report highlights significant data on fuel importation, showing a decrease in Premium Motor Spirit (PMS) imports, with 23.54 billion liters in 2022, down to 20.28 billion liters in 2023, following subsidy removal. A 10-year analysis shows 2022 had the highest annual PMS imports, while 2017 had the lowest.
On crude oil production, 2022 saw a decline of 11%, with 490.945 million barrels compared to 556.130 million barrels in 2021. However, in 2023, production increased by 9.5% to 537.571 million barrels. Crude lifting also increased by 11%, from 482.074 million barrels in 2022 to 534.159 million barrels in 2023. Oil theft and crude losses dropped significantly by 79%, with 7.68 million barrels lost in 2023 compared to 36.69 million barrels in 2022.
The overall revenue generation in 2022 and 2023 shows material companies accounted for 96% and 95% of total revenues, respectively. Revenues were sourced from taxes, oil and gas sales, NLNG dividends, royalties, and other streams.
NEITI’s report provides comprehensive insights into the oil and gas sector, covering regulatory frameworks, legal and fiscal regimes, sector reforms, and the Petroleum Industry Act (PIA) 2021. The report also reviews property rights, contracts, and participation of state-owned enterprises.
Sen. George Akume, Secretary to the Government of the Federation and NEITI board chair, reaffirmed the Federal Government’s commitment to transparency in resource management. He emphasized the role of NEITI in guiding policy decisions and combating corruption in the sector. The Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji, highlighted the transparency of the report preparation process, while EFCC Chairman, Mr. Olanipekun Olukoyede, announced that the anti-graft agency recovered over N1 billion based on NEITI’s past reports and will continue to investigate findings from the current reports.
The NEITI 2022/23 Independent Report underscores the need for a Presidential Committee to guide the implementation of the Petroleum Industry Act and other governance reforms. The event was attended by National Assembly members, industry leaders, diplomats, and civil society organizations.
Source: NEITI
