The ability of the Federal government to generate revenue is threatened as the Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed huge revenue debt owed the federal government by oil and gas companies operating in the country.
In its ‘2022/2023 Independent Oil and Gas Industry Report’ unveiled in Abuja on Thursday, the oil and gas industry watchdog claimed that the federal government is owed $6.071 billion and N66.4 billion, respectively, in unpaid revenue by oil companies operating in the country as of June 2024.
In his opening address, Executive Secretary of NEITI, Dr Orji Ogbonnaya Orji while highlighting the key highpoints of the report called for improved compliance with regulatory frameworks, and increasing transparency in the industry.
“The NEITI 2022/2023 Oil and Gas Industry Reports contain several key findings and recommendations. These include the identification of revenue leakages, the need for improved compliance with regulatory frameworks, and suggestions for increasing transparency in oil and gas operations”.
Giving a breakdown of the debt, NEITI said outstanding liabilities were $6.049 billion and N65.9 billion in unpaid royalties and gas flare penalties, due to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) as of August 31.
Also, outstanding Petroleum Profit Taxes (PPT), Company Income Taxes (CIT), Withholding Taxes, and Value-added Tax (VAT) amounting to $21.9 million and N492.8 million were due to the Federal Inland Revenue Service (FIRS) as of June 2024.
NEITI said among other key findings in the report, is a significant reduction in petrol importation — which fell from 23.54 billion litres in 2022 to 20.28 billion litres in 2023.
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Also, NEITI said N15.87 trillion was claimed as under-recovery or price differentials between 2006 and 2023, with the highest amount, N4.71 trillion, recorded in 2022.
“On crude production, fiscalized crude production in 2022 stood at 490.945 million barrels, compared to 556.130 million barrels produced in 2021, representing an 11% decline,” the agency said.
“However, in 2023, NEITI’s independent report revealed total fiscalised production of 537.571 million barrels, a 46.626 million-barrel or 9.5 percent increase from total production recorded in 2022.
“A 10-year trend (2014–2023) of fiscalised crude oil production in Nigeria shows the highest production volume of 798.542 million barrels was recorded in 2014, while the lowest, 490.945 million barrels, was recorded in 2022.”
According to NEITI’s data on crude lifting, in 2023, 534.159 million barrels were lifted, compared to 482.07 million barrels in 2022 and 551 million barrels in 2021.
“On oil theft and crude losses, a total of 7.68 million barrels of crude were either stolen or lost in 2023, representing a significant drop of 79% (29.02 million barrels) compared to 36.69 million barrels either stolen or lost in 2022,” the report said.
“On overall revenue generation in the oil and gas industry, the report showed that material companies accounted for $15.549 billion (96%) and non-material companies for $695.604 million (4%) in revenues generated in 2022.
“In 2023, material companies accounted for US$21.415 billion (95%), and non-material companies accounted for $1.238 billion (5%). The revenues came from 17 identified revenue streams, including proceeds from taxes, oil and gas sales, dividends from NLNG, royalty payments, signature bonuses, gas flare penalties, and concessions.”
By: Babajide Okeowo
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