NEITI Reveals Oil and Gas Industry’s $6.1bn Debt to FG
The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that the oil and gas industry owes the federal government a whopping $6.1 billion in outstanding liabilities as of August 2024.
These are made up of outstanding royalties, taxes, rents and other collectible revenues due to be collected into government coffers, NEITI said in a report it presented to the Senate.
“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 Executive Secretary of NEITI, Dr Orji Ogbonnaya Orji, said.
This is as the agency renewed its call for the urgent and comprehensive reform of the Nigerian solid minerals sector.
Orji renewed the call while interacting with the Senate Committee on Public Accounts – SPAC on its industry reports for the oil, gas and mining sectors covering years 2021, 2022 and 2023.
Presenting the reports, Orji lamented the abysmal performance of the sector which he says does not mirror the vast mineral deposits in Nigeria and the potentials that the sector holds for the economy.
The executive secretary added, “The solid minerals industry contributing less than one percent to the GDP, needs urgent help, intervention and progressive legislation that would attract investors. NEITI works with the ministry and we know what the challenges are, they also need support. The data we presented reflects the current situation and activities in the sector, but that is not in any way near the potential of the sector.”
He added that the information and data provided by NEITI is put in the public domain with the expectation that “policy makers and the legislature will use the information to initiate the comprehensive reforms needed in the sector.”
On the oil and gas industry reports, Orji pointed out that Nigeria recorded some positive milestones in the 2023 report.
He said, “One of the significant progresses recorded in the oil and gas sector in 2023, is the drop in crude oil losses by 78%. The NEITI report showed that Nigeria lost 36.6 million barrels of crude oil in 2022 while 2023 records indicated a significant drop to 7.68 million barrels”.
Another positive indicator in the oil and gas report is the fall on importation figures. Fuel imports declined by 3.5billion litres, from the 23.54 billion litres recorded in 2022 to 20.28 billion litres in 2023. This was attributed to the removal of subsidy.
The NEITI reports however revealed a decline in revenues from the sector by 13.7% between 2022 and 2023.
“The oil and gas sector recorded a total revenue of $35.78 billion in 2022, but dropped to $30.86 billion in 2023. The NEITI report also showed that Nigeria earned a total of $831.14 billion between 1999 – 2023 (25yrs),” Orji stated.
Similarly, the NEITI reports also showed that the sector’s contribution to Nigeria’s GDP consistently declined for the three years under review. It presented the figures of 7.24% for 2021, 5.74% for 2022 and 5.48% for 2023 respectively.
On the same trajectory, gas production also declined during the period from 2.47 billion scf in 2021, to 2.52 billion scf in 2022 and lower to 2.49 billion scf in 2023. Dr Orji called for clear alignment between Nigeria’s gas commercialisation and energy transition policies and the Climate Change Act to accelerate the country’s journey to affordable, clean and renewable energy.
