The Nigeria Extractive Industries Transparency Initiative (NEITI) has revealed that oil and gas companies operating in the country owe the Federal Government $6.1 billion in unpaid royalties, taxes, rents and other collectible revenues as of August 2024.
The regulatory agency has urged the government to recover the outstanding liabilities to support funding for the 2025 Budget.
NEITI’s Executive Secretary, Dr. Ogbonnaya Orji, made the disclosure during an engagement with the Senate Committee on Public Accounts, where he presented industry reports covering 2021, 2022, and 2023 for the oil, gas, and mining sectors.
“A total sum of $6.1bn as outstanding liabilities owned by the oil and gas industry to the federation as of August 2024. These are made up of outstanding royalties, taxes, rents, and other collectible revenues due to be collected into government coffers.
“At a time when the country is mobilising resources to meet its budget expenditures, recovering these revenues by the relevant agencies will be a huge relief to the government,” the statement read.
While NEITI acknowledged some progress in the oil and gas sector, it noted that challenges persist in revenue collection, crude theft, and production inefficiencies.
“One of the significant progresses recorded in the oil and gas sector in 2023, was the drop in crude oil losses by 78 per cent. The NEITI report showed that Nigeria lost 36.6 million barrels of crude oil in 2022 while 2023 records indicated a drop to 7.68 million barrels,” Orji stated.
The agency commended the Office of the National Security Adviser, the Armed Forces, and Security Agencies for enhanced surveillance of pipelines, which helped deter oil theft. NEITI further recommended active involvement of host communities to curb illegal activities in oil-producing regions.
“The ownership and buy-in of the host communities in order to curb crude oil theft” remains crucial in tackling revenue losses, the statement added.
Despite some positive developments, NEITI’s report highlighted revenue declines in the oil and gas sector, posing concerns for Nigeria’s economic stability.
“The oil and gas sector recorded a total revenue of $35.78bn in 2022 but dropped to $30.86bn in 2023. The NEITI report also showed that Nigeria earned a total of $831.14bn between 1999 – 2023 (25yrs),” Orji stated.
Further analysis showed a steady decline in the sector’s contribution to GDP over the past three years, with figures dropping from 7.24% in 2021 to 5.48% in 2023. Gas production also followed a downward trajectory, declining from 2.52 billion scf in 2022 to 2.49 billion scf in 2023.
NEITI urged the government to align its gas commercialization and energy transition policies with the Climate Change Act, emphasizing the importance of affordable and renewable energy solutions for sustainable development.
On the solid minerals sector, Orji described its performance as abysmal, noting that the revenue generated does not reflect Nigeria’s vast mineral deposits or the potential contributions of the industry to economic growth.
Senator Aliyu Wadada, Chairman of the Senate Committee on Public Accounts, confirmed plans to hold a public hearing on NEITI’s industry reports. He warned that all companies with outstanding liabilities must appear before the committee to justify their unpaid debts.
He also lamented the low revenue remittances from the solid minerals sector, stating that recorded earnings fail to match the sector’s capacity to generate higher revenue for the Nigerian economy.
With oil remaining Nigeria’s dominant revenue source, the push to recover the $6.1 billion owed by industry operators is expected to gain momentum in the coming months. The government is under growing pressure to plug revenue leakages, boost economic stability, and maximize returns from its natural resources.
