NEITI Report Reveals $6.175 Billion Owed by Oil Companies, Highlights Revenue Decline and Subsidy Changes
2 min readOil companies owe the Federal Government $6.175 billion in unpaid royalties and taxes, as revealed by an audit conducted by the Nigeria Extractive Industries Transparency Initiative (NEITI).
A recent oil and gas industry report presented by the Nigeria Extractive Industries Transparency Initiative (NEITI) in Abuja revealed significant financial shortfalls in the sector. As of August 31, 2024, oil companies owe the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) a total of $6.071 billion and ₦66.4 billion in unpaid royalties and gas flare penalties.
Additionally, outstanding payments to the Federal Inland Revenue Service (FIRS) include $21.926 million and ₦492.8 million in petroleum profit taxes, company income taxes, withholding taxes, and VAT, as of June 2024.
The report also highlighted a 9% decline in industry revenue in 2023, with figures dropping to $16.467 billion from $18.106 billion in 2022. Notably, NEITI reported a total loss of 7.68 million barrels of crude oil due to theft and measurement errors, marking a substantial decrease of 79% from the 36.69 million barrels lost in 2022. Additionally, 153.44 million barrels of crude oil production were deferred, with Shell Petroleum Development Company (SPDC) being the most affected at 39.13 million barrels, followed by Total Exploration and Production Nigeria (TEPNG) at 6.07 million barrels, and Total Upstream Nigeria (TUPNI) at 3.5 million barrels.
The report revealed that the Nigerian government spent ₦3.01 trillion on petrol subsidies in 2023, a decrease from ₦4.71 trillion in 2022. It noted that a total of 20.28 billion litres of premium motor spirit (PMS) were imported in 2023, down from 23.54 billion litres in 2022—a decline of 3.25 billion litres, or 14%, following the removal of the subsidy.
A comprehensive 10-year trend analysis (2014-2023) indicated that the highest annual PMS importation occurred in 2022 at 23.54 billion litres, while the lowest was in 2017, with 16.88 billion litres. Additionally, a staggering ₦15.87 trillion was reported as under-recovery or price differentials from 2006 to 2023, with the peak amount of ₦4.714 trillion recorded in 2022.
During the report’s unveiling, Secretary to the Government of the Federation, Sen. George Akume, assured stakeholders that the government remains committed to allowing NEITI the autonomy to fulfill its mandate in line with the global Extractive Industries Transparency Initiative (EITI).
Sen. George Akume, in his capacity as Chairman of the NEITI Board, emphasized the Federal Government’s commitment to NEITI’s independence during the report unveiling. He stated, “While my role as Chairperson highlights the government’s respect for NEITI, it also signifies our dedication to ensuring that NEITI operates independently and without interference, as mandated by EITI standards. We must protect this independence with care to prevent undue influence.”
Meanwhile, Olanipekun Olukayode, Chairman of the Economic and Financial Crimes Commission (EFCC), vowed to utilize the latest NEITI report to recover all outstanding revenues from oil companies. He announced that the EFCC has successfully recovered and remitted over ₦1 billion to the Federal Government from past NEITI reports.
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