NEITI Report Reveals Over $6 Billion in Outstanding Revenues Due to FG in Oil and Gas Sector

…..by Ben Ndubuwa……..

The Nigeria Extractive Industries Transparency Initiative (NEITI) has disclosed that outstanding collectible revenues from the oil and gas industry owed to the Federal Government have risen to over $6.071 billion and N66.4 billion as of June 2024. This revelation was made in the 2022/2023 Independent Oil and Gas Industry Report released by NEITI today.

A detailed breakdown shows that $6.049 billion and N65.9 billion in unpaid royalties and gas flare penalties are due to the Nigerian Upstream Petroleum Regulatory Commission. Additionally, $21.926 million and N492.8 million in petroleum profit taxes, company income taxes, withholding taxes, and VAT are outstanding to the Federal Inland Revenue Service.

The report also highlights a 14% reduction in fuel importation following the subsidy removal, with 20.28 billion litres of Premium Motor Spirit (PMS) imported in 2023, down from 23.54 billion litres in 2022. A total of N15.87 trillion was claimed as under-recovery between 2006 and 2023, with N4.714 trillion recorded in 2022 alone.

On crude oil production, fiscalised crude in 2023 increased by 9.5% to 537.571 million barrels compared to 2022’s 490.945 million barrels. Crude lifting saw a similar 11% rise in 2023, reaching 534.159 million barrels. However, crude theft dropped significantly, with only 7.68 million barrels stolen in 2023, marking a 79% reduction from the previous year.

Revenue generation from material companies amounted to $15.549 billion in 2022 and $21.415 billion in 2023, accounting for the vast majority of the industry’s earnings. NEITI also examined the sector’s regulatory framework and highlighted the need for a strategic implementation plan for the Petroleum Industry Act (PIA).

Speaking at the presentation of the report, the Secretary to the Government of the Federation, Sen. George Akume, reaffirmed the Federal Government’s commitment to transparency in the oil and gas sector, emphasizing NEITI’s role in combating inefficiencies and corruption. The Chairman of the EFCC, Mr. Olanipekun Olukoyede, also vowed that the EFCC would investigate NEITI’s findings and pursue further recoveries, having already recovered over N1 billion based on previous reports.

The report calls on the President to reconstitute a committee to oversee the implementation of the PIA and suggests other governance reforms to improve the sector’s accountability and efficiency.

The event was attended by key government officials, industry leaders, and civil society groups.