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A civic data-driven organisation, BudgIT Nigeria, has tasked the Nigeria Extractive Industries Transparency Initiative (NEITI) to step up its performance by addressing issues of under-remittance in the oil and gas sector.
The firm explained that it had critically assessed the sector’s report released last December and came up with salient analysis, demanding action from regulatory bodies in the sector.
NEITI, a body that monitors the improvement of transparency and accountability in the management of revenues from natural resources, last year released the audit report of the oil and gas industry for 2016.
From the report, BudgIT said there were three cases of under-remittance in the first quarter of 2016 in which unit prices and crude values on the sales invoice were higher than the recorded figure in the sales profile, amounting to an aggregate revenue loss of $7.82 million.
“From our analysis, this revenue loss alone can be used to build and equip almost 500 hospitals in oil-rich but devastated communities in the Niger Delta region,” it stated.
In the same vein, the firm observed that Nigerian National Petroleum Corporation (NNPC) failed to apply market rate as advised by the Central Bank of Nigeria (CBN), to convert the sales proceeds received in United States dollars for domestic crude sales, which resulted in a revenue loss of N260.43 million.
According to the communication associate of the firm, Shakir Akorede, an under-remittance of N4.02 million was also observed in 2015 due to similar practices.
BudgIT also found that losses arising from crude oil theft and sabotage in the upstream and downstream sectors amounted to $869.02 million and $3.55 billion respectively.
Similarly, 23 companies incurred a liability of $3.63 million on gas flare penalty in 2016. This can actually be expended on four research and development (R&D) projects in the oil and gas sector.
Worried by the huge loss, BudgIT calls on all entities that have been identified with outstanding issues to resolve them immediately.
Principal lead of the company, Gabriel Okeowo, said: “We note with dismay that some of the issues have not only persisted but have also escalated over the years. We are charging all regulatory bodies of government to wake up to their responsibilities in ensuring compliance with the rules of engagement.”
Okeowo lamented that if the loss in revenue is properly structured back into the economy, the huge amount that goes down the drain will contribute to the Economic Recovery and Growth Plan (ERGP) of the federal government.
NEITI is a federal government agency established by law, monitored and supervised by the Office of the Secretary to the Government of the Federation (OSGF). It is an autonomous, self-accounting body, which, by law, reports to the president and the National Assembly.