Oil companies’ indebtedness to the Federal Government in terms of royalties and taxes has risen to $6.175bn, according to an audit of the petroleum industry by the Nigeria Extractive Industries Transparency Initiative (NEITI).
The oil and gas industry report, presented on Friday in Abuja, detailed that as of August 31, 2024, there is $6.071 billion and ₦66.4 billion in unpaid royalties and gas flare penalties owed to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
Additionally, outstanding petroleum profit taxes, company income taxes, withholding taxes, and VAT owed to the Federal Inland Revenue Service (FIRS) amount to $21.926 million and ₦492.8 million as of June 2024.
The NEITI report also highlighted a 9% decline in industry revenue for 2023, with $16.467 billion reported compared to $18.106 billion in 2022.
The report noted a total loss of 7.68 million barrels of crude oil in 2023 due to theft and measurement errors, marking a significant decrease of 79% from the 36.69 million barrels lost in 2022. Furthermore, 153.44 million barrels of crude oil production were deferred in 2023, with companies like SPDC (39.13 million barrels), TEPNG (6.07 million barrels), and TUPNI (3.5 million barrels) being the most affected.
It was also revealed that the government spent ₦3.01 trillion on petrol subsidies in 2023, a decrease from ₦4.71 trillion in 2022.
The report indicated that 23.54 billion liters of PMS (premium motor spirit) were imported into the country in 2022, while 20.28 billion liters were imported in 2023, representing a decline of 3.25 billion liters or 14% following the removal of the subsidy.
“A detailed 10-year trend analysis (2014-2023) 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. A total of N15.87 trillion was claimed as under-recovery/price differentials between 2006 and 2023, with the highest amount, N4.714 trillion, recorded in 2022”.
Speaking at the report unveiling, the Secretary to the Government of the Federation, Sen. George Akume assured stakeholders that the government would continue to grant NEITI the freedom to fulfil its mandate to the country and the global Extractive Industries Transparency Initiative, EITI.
Sen. 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 Chairman of the Economic and Financial Crimes Commission (EFCC), Olanipekun Olukayode, pledged to utilize the latest report to ensure the government recovers all outstanding revenues from the companies.
He announced that based on previous NEITI reports, the EFCC recently recovered and remitted over ₦1 billion to the Federal Government’s coffers.