Nigeria Earned $23.04bn From Oil In 2021 As NNPCL, Others Owe Federation $8.26bn

executive secretary of NEITI, Dr Orji Ogbonnaya Orji (3rd from left) supported by other stakeholders during the launch of NEITI 2021 oil and gas industry report in Abuja on Monday

By Juliet Ukanwosu

The Nigerian government earned a total of $23.04 billion from the oil and gas sector in 2021, while the Nigerian National Petroleum Company Limited (NNPCL) and 47  other companies in the sector failed to remit $8.26 billion in the year 2021.

The information and data is contained in the 2021 Oil and Gas Industry Report by the Nigeria Extractive Industries Transparency Initiative (NEITI) released in Abuja on Monday.

A breakdown of the unremitted revenue showed that a total of $13.591 million was payable to the Federal Inland Revenue Service (FIRS) as of July 31, 2023, while the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had outstanding tax collectible revenues of $8.251 billion as at December 31, 2022. Over 80% of these outstanding financial liabilities are owed by NNPCL.

The report puts unremitted revenues and quasi-fiscal expenditure by the NNPCL at $1.95 billion (8.47%) and $6.93 billion (30.08%) respectively. The quasi-fiscal expenditure of $6.931billion (equivalent of N2.651trillion) were deducted from the Federation’s revenue before remittance, without appropriation by the National Assembly, the report noted.

A breakdown of the unremitted $1.95 billion by the NNPCL during the year under review showed that the Company withheld $722.6 million from NLNG dividend; $871.15 million from domestic crude sales, $859,583 million miscellaneous revenue and $286.42 million from export crude sales. $24.332million and $45.76million were also withheld from transportation revenue and domestic gas proceeds.

Furthermore, the report showed that the total earnings of $23.046 billion from the sector in 2021 is about 13% higher than the corresponding total of $20.43 billion realized in 2020. A breakdown of the earnings showed that about $8.67 billion, or 37.6% of the revenue was realized from the sale of crude oil and gas; $13.37 billion, or 58.02%, from taxes and other specific revenue flows, and $1.01 billion, or 4.38%, went into payments to sub-national entities.

Transfers to the Federation amounted to $13.2 billion (57.27%), while Sub-national payments totaled $963.63 million or 4.18%. Available revenue for sharing by the federating units after the deductions and in accordance with the revenue allocation formula was $13.2 billion which represented 57.27% of the total revenue collected. This is lower than the 71.7% shared in 2020.

Similarly, an analysis of the $6.93 billion deducted by the NNPCL at source showed payments of $3.52 billion or 15% for Joint Venture Cost Recovery and $3.031 billion (about N1.16 trillion) or 13.15% for fuel subsidy. Other deductions are $258.43 million for government priority projects; $75.51 million for pipeline maintenance and holding cost and $42.40 million for crude oil and products losses.

Meanwhile, the report indicated that total metered crude oil production in the year under review was 634.60 million barrels, out of which the nation lost 68.47 million barrels to production adjustment, measurement error, theft and sabotage. The figure showed a 13% reduction from the production volumes of 2020.

Executive Secretary of NEITI, Dr. Orji Ogbonnaya Orji while presenting the highlights of the report lamented that despite the concerted efforts made last year to recover some of the revenues through the Ad Hoc Committee that was set up by the National Assembly, the 2021 figures showed an increase.

The Secretary to the Government of the Federation, Senator George Akume, who was represented by the Permanent Secretary, Political and Economic Affairs Mrs. Esuabana Nko, while unveiling the report reaffirmed the federal government’s commitment to support and deepen the implementation of the EITI in Nigeria.

While reaffirming governments commitment to support and strengthen anti-corruption and reform oriented agencies like NEITI, she added that the 2021 Industry Reports being unveiled was quite timely, coming when the present administration is fully committed to shoring up revenues through priority attention to attracting investments to the key sectors of our economy.

Also speaking, members of the National Assembly who included Chairman Senate Committee on Oil and Gas Host Communities, Sen. Benson Agadaga, Chairman Senate Committee on Petroleum Upstream, Sen. Eteng Williams and the Chairman, House Committee on Petroleum Resources, (Downstream) Hon. Ikeagwuonu Ugochinyere, all pledged the support of the National Assembly to debate the report at parliament  as well as ensure the implementation of the recommendations in the report.

The Minister of Budget and National Economic Planning Sen. Abubakar Atiku Bagudu represented by the Permanent Secretary, Nebeolisa Anako stated that the data generated by NEITI will help the ministry in its planning mandate for the country.

“The budget outlay for the country for the current national development plan for five years is N348trillion. Majority of this inflow is going to be from the private sector and the oil and gas sector is key to the realization of this goal,” he said.


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