The Federal Government, on Thursday, said the amount spent on subsidising Premium Motor Spirit, popularly called petrol, between 2005 and 2021 was N13tn, adding that the country lost N16.3tn to oil theft from 2009 to 2020.
It disclosed this in Abuja through the
Nigeria Extractive Industries Transparency Initiative at a policy dialogue on
oil swap, co-hosted by NEITI and Policy Alert, an indigenous civil society
organisation, with support from the Opening Extractives.
In a presentation by NEITI’s Executive
Secretary, Orji Ogbonnaya-Orji, which was made available to our correspondent,
he said there was an urgent need to make decision on the agitation for the
removal of fuel subsidies.
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.
On crude oil theft, he said NEITI policy
brief and data pulled from industry reports of the oil and gas sector “showed
that between 2009 and 2020 (12-year period), Nigeria lost 619.7 million barrels
of crude oil valued at $46.16bn or N16.25tn.”
Orji explained that the volume of crude oil
losses represented a loss of more than 140,000 barrels per day, adding that
between 2009 and 2018, Nigeria also lost 4.2 billion litres of petroleum
products from refineries valued at $1.84bn.
“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.
Progress on PIA implementation unknown
The presentation also talked about the status
of the implementation of the Petroleum Industry Act, stressing that its
progress had not been made public.
Recall that the PIA made copious provisions
for the deregulation of the downstream sector of the petroleum industry. A
Presidential Steering Committee on the implementation of the PIA was set up in
2021 to coordinate the implementation of the Act.
“Not much is in the public domain on the
progress of the committee’s work. Civil society should step up advocacies for
the conclusion of the committee’s work and submission of its report to the
President before the expiration of this administration with clear
recommendations to the next administration on what has been done and
outstanding work,” Orji stated.
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