The Nigeria Extractive Industries Transparency Initiative (NEITI) has unveiled startling revelations about the outstanding revenues owed to the Federal Government by the oil and gas industry. As of June 2024, the sector’s debt to the government has risen to $6.071 billion and N66.4 billion, as detailed in NEITI’s 2022 and 2023 Independent Oil and Gas Industry Reports.
This report was publicly presented in Abuja by the Chairman of the Economic and Financial Crimes Commission (EFCC), Mr. Ola Olukoyede, alongside Senator George Akume, Secretary to the Government of the Federation and Chairman of NEITI’s National Stakeholders Working Group (NSWG).
Mr. Olukoyede expressed the government’s commitment to addressing these financial discrepancies, revealing that over N1 billion has already been recovered and transferred into the Federation Account as a result of previous NEITI audits. He further emphasized the EFCC’s role in prosecuting cases related to financial infractions uncovered in these reports. Where NEITI’s work stops, we take off," he said, highlighting the agency’s determination to ensure the recommendations in the report are implemented, particularly those relating to violations of financial laws.
The report shows that as of August 2024, unpaid royalties and gas flare penalties owed to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) amounted to $6.049 billion and N65.9 billion. In addition, the Federal Inland Revenue Service (FIRS) is owed $21.926 million and N492.8 million in petroleum profit taxes, company income taxes, withholding taxes, and Value Added Tax (VAT).
This report provides detailed analysis on who owes what, offering a transparent look into the financial obligations the oil and gas sector has yet to meet.
The NEITI report also provides insights into Nigeria’s fuel importation trends. In 2022, the country imported 23.54 billion litres of Premium Motor Spirit (PMS), a record high. However, in 2023, PMS importation dropped by 14%, down to 20.28 billion litres following the removal of the fuel subsidy.
Looking back over the last decade (2014-2023), the highest PMS importation occurred in 2022, while the lowest was recorded in 2017 with 16.88 billion litres. The report also disclosed that a staggering N15.87 trillion was claimed as under-recovery/price differentials between 2006 and 2023, with the highest amount, N4.714 trillion, claimed in 2022.
On crude oil production, Nigeria saw a decline in fiscalised crude production in 2022, which dropped to 490.945 million barrels, down from 556.130 million barrels in 2021 a decrease of 11%. However, in 2023, the country’s production increased to 537.571 million barrels, a 9.5% rise from the previous year.
A decade-long analysis (2014-2023) showed that the highest crude oil production volume was recorded in 2014, with 798.542 million barrels, while the lowest was in 2022 at 490.945 million barrels.
NEITI’s latest report underscores the urgent need for accountability in Nigeria’s oil and gas industry. With billions of dollars in unpaid taxes, royalties, and penalties, the government has a clear mandate to recover these funds and ensure the sector operates with greater transparency. As the EFCC and other agencies intensify their efforts to implement the report’s recommendations, it is clear that this financial audit could mark a turning point for the country’s extractive industries and broader economic landscape.