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Thursday, November 7

NEITI: Nigeria loses $42 billion to crude oil theft in 10 years

The Nigeria Extractive Industries Transparency Initiative (NEITI) on Wednesday revealed that the country in the last 10 years lost $42 billion to crude oil theft.

This revelation was contained in a Policy Brief titled, ‘Stemming the Increasing Cost of Oil Theft to Nigeria’ and released on Wednesday in Abuja.

But to combat the ills and reverse the trend, NEITI urged the Federal Government to embrace oil fingerprinting technology, comprehensive metering infrastructure of all facilities, and other creative strategies.

A breakdown shows that the nation lost $38.5 billion on crude theft alone, $1.56 billion on domestic crude and another $1.8 billion on refined petroleum products between 2009 and 2018.

The agency further expressed concerns that in the face of current dwindling revenues, paying priority attention to curb oil theft in the country’s oil and gas industry has become both necessary and urgent to expand revenue generation.

The NEITI report further disclosed that Nigeria losses an average of $11 million daily which translates to $349 million in a month and about $4.2 billion annually to crude and product losses arising from stealing, process lapses and pipeline vandalism.

“While figures from government put the loss at between 150,000 and 250,000 bpd, data from private studies estimate the figure to be between 200,000 and 400,000 bpd. This implies that Nigeria may be losing up to a fifth of its daily crude oil production to oil thieves and pipeline vandals,” the report said.

On comparative analysis of the size and implication of the losses to the country’s current dwindling revenue profile, NEITI renewed its appeal to the government to curb oil theft to reduce budget deficits and external borrowing.

The transparency agency stated that the value of crude oil and allied products so far lost are equal to the size of Nigeria’s entire foreign reserves. “Stemming this haemorrhage and leakages should be an urgent priority for Nigeria at a time of dwindling revenues and increasing needs,” the report stressed.

According to the NEITI report, what the country lost in 20 months in fiscal terms is “enough to finance the proposed budget deficit for 2020; in 15 months to cover total proposed borrowing or increase capital budget by 100% and in five months to cover pensions, gratuities and retirees’ benefits for 2020”.

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