According to the Federal Government, between 2005 and 2021, N13 trillion was spent on petrol subsidies. From 2009 to 2020, however, N16.3 trillion was lost to oil theft, the government added.
At a policy conversation on oil swap that was co-hosted by the Nigeria Extractive Industries Transparency Initiative and Policy Alert, an indigenous civil society organization, with assistance from the Opening Extractives, it was revealed in Abuja.
Orji Ogbonnaya-Orji, the executive secretary of NEITI, stated in a presentation that was made accessible to our reporter that a decision about the campaign to end gasoline subsidies must be taken immediately.
He stressed that the full deregulation of the petroleum sector would permanently lay to rest the conversation around oil swaps, adding that latest findings by NEITI showed the humongous amount spent on subsidising fuel by the government.
“NEITI’s latest policy brief titled, ‘The cost of fuel subsidy: A case for policy review,’ revealed that Nigeria expended over N13tn ($74bn) on fuel subsidies between 2005 and 2021.
“The figure in relative terms is equivalent to Nigeria’s entire budget for health, education, agriculture, and defence in the last five years, and almost the capital expenditure for 10 years between 2011 2020. It is also important to note other economic opportunity costs of fuel subsidy which include slashing allocations for the health, education, and technology infrastructure sectors.
“Others include the deterioration of the downstream sector with the declining performance of Nigeria’s refineries and recording zero production in 2020; disincentivised private sector investment in the down and mid-stream petroleum sector; low employment generation since the refining process is done outside the shores of Nigeria; worsening national debt; declining balance of payment, forex pressures and depreciation of the naira and of course product losses, inefficient supply arrangements, scarcity and its attendant queues, etc,” Orji stated.
Regarding crude oil theft, he said that information from industry reports and the NEITI policy brief “showed that Nigeria lost 619.7 million barrels of crude oil worth at $46.16 billion or N16.25 trillion between 2009 and 2020 (12-year period).”
According to Orji, Nigeria lost 4.2 billion liters of petroleum products from refineries valued at $1.84 billion between 2009 and 2018, which amounted to a loss of more than 140,000 barrels of crude oil every day.
“These findings and recommendations on tackling crude oil theft have been submitted to the President through the Presidential Committee on Crude Oil Theft, in which NEITI also served as a member.
“The committee has concluded its work and submitted its report to the President. The committee did an excellent job with far reaching recommendations. I will like to commend the Office of the NSA (National Security Adviser) that coordinated that panel’s work,” the NEITI boss stated.
