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How Nigeria Lost $42 Billion To Crude Oil Theft — NEITI

How Nigeria Lost $42 Billion To Crude Oil Theft — NEITI

How Nigeria Lost $42 Billion To Crude Oil Theft — NEITI

Nigeria lost about $42 billion to crude theft as well as domestic and refined petroleum products losses between 2009 and 2018, the Nigeria Extractive Industries Transparency Initiative (NEITI) has said.

In the latest edition of its Policy Brief titled “Stemming the Increasing Cost of Oil Theft to Nigeria” published Wednesday in Abuja, NEITI alerted the nation that crude oil and refined product valued at about $41.9 billion were stolen from Nigeria during the period.

The brief contains graphic information and data on the cost of oil theft to the country as well as other far-reaching recommendations in the areas of security overhaul, country engagements, diplomatic approach, enforcement, etc.

Details
The report gave the breakdown of the losses to include about $38.5 billion on crude theft alone, $1.6 billion on domestic crude and another $1.8 billion on refined petroleum products.

NEITI blamed the losses to the government not embracing oil fingerprinting technology, absence of comprehensive metering infrastructure of all oil facilities, and other creative strategies to combat the growing menace of theft of Nigeria’s crude oil and refined petroleum products.

The transparency agency said in the face of current dwindling revenues, paying priority attention to oil theft in the country’s oil and gas industry has become necessary to expand revenue generation.

In addition, the report said Nigeria loses an average of $11 million daily, $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 150,000-250,000 barrels per day (bpd), data from private studies give an estimate of 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. Stemming the haemorrhage and leakages should be an urgent priority for Nigeria at a time of dwindling revenues and increasing needs,” the report said.

‘Loss equivalent to foreign reserves’
The transparency agency put the value of crude oil and allied products so far lost are equal to the size of Nigeria’s entire foreign reserves.

In comparison, the report said the size and implication of the losses to the country’s current dwindling revenue profile have heightened the need for government to take steps to curb oil theft to reduce budget deficits and external borrowing.

“What the country lost in 20 months in fiscal terms is enough to finance the proposed budget deficit for 2020, while in 15 months, it will cover total proposed borrowing, or increase capital budget by 100 per cent, and in five months to cover pensions, gratuities and retirees’ benefits for 2020,” the report said.

NAN

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