The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that Nigeria has lost trillions of naira to fuel subsidies and oil theft over the years.
In a policy dialogue on oil swap in Abuja, NEITI’s Executive Secretary, Orji Ogbonnaya-Orji disclosed that between 2005 and 2021, the country spent over N13tn ($74bn) on fuel subsidies.
He stated that this amount is equivalent to Nigeria’s entire budget for health, education, agriculture, and defence in the last five years.
In addition to the huge cost of fuel subsidies, Nigeria has also lost N16.3tn to oil theft between 2009 and 2020. According to Orji, this translates to over 140,000 barrels of crude oil lost per day.
He further explained that Nigeria lost 4.2 billion litres of petroleum products from refineries valued at $1.84bn between 2009 and 2018.
The NEITI boss emphasized the need for the full deregulation of the petroleum sector, stating that this would permanently lay to rest the conversation around oil swaps.
He also highlighted the negative effects of fuel subsidies, including the deterioration of the downstream sector and disincentivized private sector investment in the petroleum sector.
While the Petroleum Industry Act (PIA) made provisions for the deregulation of the downstream sector, the progress on its implementation has not been made public.
The NEITI Executive Secretary urged civil society to step up advocacy for the conclusion of the committee’s work and submission of its report to the President before the expiration of this administration.
Nigeria’s huge losses to fuel subsidies and oil theft highlight the urgent need for the full deregulation of the petroleum sector.
This would not only end the conversation around oil swaps but also lead to increased private sector investment, job creation, and economic growth.
It is important for the government to prioritize the implementation of the PIA to address the challenges facing the downstream sector.
