… Report Says FG Paid N15.87tn Subsidy Between 2006- 2023
… Oil & Gas Industry Records $38.89bn Revenue In 2022,2023
A report published by the Nigeria Extractive Industries Transparency Initiative (NEITI) revealed that the outstanding collectable revenues due to the Federal Government in the oil and gas industry as of June 2024 have risen to over $6.071bn and N66.4bn.
The figures were revealed in the 2022-2023 Independent Oil and Gas Industry Report, released by NEITI on Thursday and obtained by NewsNGR.
The report covered 78 companies in the oil and gas industry and nine relevant government agencies that collect, keep custody, or manage oil and gas revenues.
The report shows that the outstanding liabilities were $6.049bn and N65.9bn in unpaid royalties and gas flare penalties, due to the Nigerian Upstream Petroleum Regulatory Commission as collectable revenues by August 31, 2024.
A breakdown further shows that outstanding petroleum profit taxes, company income taxes, withholding taxes, and VAT due to the Federal Inland Revenue Service (FIRS) amounted to $21.926m and N492.8m as of June 2024.
Regarding overall revenue generation in the oil and gas industry, it was revealed that material companies accounted for US$15.549bn which is 96 per cent while non-material companies accounted for 4 per cent or $695.604m of the revenues generated in 2022.
In 2023, material companies accounted for US$21.415bn or 95 per cent of total revenue while non-material companies accounted for US$1.238bn or 5 -per cent.
Cumulatively, $38.89bn revenue was recorded by the oil and gas industry in 2022 and 2023.
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, the report said.
The report disclosed that a total of 23.54 billion litres of PMS (premium motor spirit) were imported into the country in 2022, while 20.28 billion litres were imported in 2023. This represents a reduction of 3.25 billion litres, or a 14 per cent decline, following the removal of the subsidy.
A detailed 9-year trend analysis (2014–2023) in the NEITI report shows that the highest annual PMS importation into the country, 23.54 billion litres, was recorded in 2022, while the lowest, 16.88 billion litres, was recorded in 2017.
On subsidy payment, “The NEITI report also disclosed that a total of N15.87tn was claimed as under-recovery/price differentials between 2006 and 2023, with the highest amount, N4.714tn, recorded in 2022.
“On crude production, fiscalised crude production in 2022 stood at 490.945 million barrels, compared to 556.130 million barrels produced in 2021, representing an 11% decline. However, in 2023, NEITI’s independent report revealed total fiscalised production of 537.571 million barrels, a 46.626 million barrel or 9.5 per cent 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.
“The NEITI report also provided detailed information and data on crude lifting. In 2022, total crude lifting was 482.074 million barrels compared to 551.006 million barrels lifted in 2021. In 2023, total crude lifting stood at 534.159 million barrels, representing an 11 per cent increase of 58.08 million barrels.
“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.”
Commenting on the report, the Secretary to the Government of the Federation, Sen. George Akume, said the government is committed to the principles of the Extractive Industries Transparency Initiative (EITI) being implemented in the country’s oil and gas sector by NEITI.
Akume said, “As the Chairman of the NEITI Board, I stand before you today to underscore the Federal Government’s respect for NEITI’s independence. While my role as Chairperson is a testament to the importance the government places on NEITI, it also signifies the commitment to ensure that NEITI operates independently, without interference, as mandated by the EITI standard. We must safeguard this independence with great care and diligence, ensuring that NEITI can operate free from undue influence.”
The Executive Secretary of NEITI, Dr Orji Ogbonnaya Orji, said the report followed a meticulous and transparent process in line with global Extractive Industries Transparency Initiative (EITI) standards.
Orji said, “A rigorous, multi-stakeholder approach was adopted, involving extensive collaboration with government agencies, extractive companies, civil society, and indigenous consultants. We ensured that all data was collected, validated, and reconciled openly and transparently.”