Business newsDespite lawmakers’ intervention, unremitted income from oil sales rises to $9.85bn – NEITI by admin September 19, 2023 written by admin September 19, 2023 Bookmark 9The total unremitted revenues to the Federation by some relevant government agencies and companies in the oil and gas sector in the year 2021 have risen to over $9.85bn according to the 2021 Oil and Gas Industry Report by the Nigeria Extractive Industries Transparency Initiative (NEITI).Orji Ogbonnaya Orji, executive secretary of NEITI, while presenting the highlights of the report stated that the information and data contained in the NEITI latest reports paid special attention to helping the government at all levels to shore up revenue, support national development and poverty reduction through resource mobilisation. The report therefore provided an update on the financial liabilities of the NNPCL and some companies to the federation.He lamented that despite the concerted efforts made last year to recover some of the revenues through the Ad Hoc Committee that was set up by the National Assembly, the 2021 figures showed an increase.A compilation of the outstanding financial liabilities due to the Federation by the report indicated that a total of $13.591mn in revenues was payable to the Federal Inland Revenue Service (FIRS) as of July 31, 2023, while the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) had outstanding tax collectible revenues of $8.251bn as at December 31, 2022. Over 80 percent of these outstanding financial liabilities are owed by NNPCLThe report showed that Nigeria earned a total revenue of $23.046bn from the sector in 2021. The sum is about 13 percent higher than the corresponding total of $20.43bn realized in 2020.A breakdown of the earnings showed that about $8.67bn, or 37.6 percent of the revenue, was realized from the sale of crude oil and gas; $13.37bn, or 58.02 percent, from taxes and other specific revenue flows, and $1.01bn, or 4.38 percent, went into payments to sub-national entities.Read also Nigeria generated N814.59bn from solid minerals in 15 years — NEITIAn analysis of the total revenue realized, the report stated, showed unremitted revenues and quasi-fiscal expenditure by the NNPCL of $1.95bn (8.47 percent) and $6.93bn (30.08 percent) respectively. Transfers to the Federation amounted to $13.2bn (57.27 percent), while Sub-national payments totaled $963.63mn or 4.18 percent. Available revenue for sharing by the federating units after the deductions and in accordance with the revenue allocation formula was US$13.2billion which represented 57.27 percent of the total revenue collected. This is lower than the 71.7 percent shared in 2020.The quasi-fiscal expenditure of $6.931billion (equivalent of N2.651trillion) were deducted from the Federation’s revenue before remittance without appropriation by the National Assembly.A breakdown of the $6.93bn deductions showed payments of $3.52bn or 15% for Joint Venture Cost Recovery and $3.031bn (about N1.16 trillion) or 13.15 percent for products subsidy/value loss. Other deductions are $258.43mn for government priority projects; $75.51mn for pipeline maintenance and holding cost and $42.40mn for crude oil and products losses.The NEITI report also observed that none of the refineries was operational in 2021 despite spending about N200billion between 2020 and 2021 on refinery rehabilitation which was deducted from the Federation sales proceeds. These deductions the report reiterated, remains a heavy cost to Federation Revenue remittances.In addition, the report said about $1.95bn, or 8.47% of the total revenue was not transferred to the Federation Account by the NNPCL during the year under review. Breakdown of the withheld revenue included, $722.6million for NLNG dividend; $871.15mn from domestic crude sales, $859,583 miscellaneous revenue and $286.42mn from export crude sales. $24.332million and $45.76million were withheld from transportation revenue and domestic gas proceeds.A ten – year trend analysis of financial flows from the oil and gas sector from 2012 to 2021 showed earnings of $348.63Billion.On crude oil production and exports, the NEITI report indicated that total metered crude oil production was 634.60 million barrels, out of which the nation lost 68.47 million barrels to production adjustment, measurement error, theft and sabotage. The figure showed a 13% reduction from the production volumes of 2020.The report pointed out that a total 29 companies suffered crude losses from theft and sabotage amounting to 37.57 million barrels. The decline in crude oil losses due to theft and sabotage from 39.08million barrels in 2020 to 37.57million barrels in 2021 was generally due to the decline in crude oil production during this period.On gas production and utilization, the NEITI report said a total of 2.74million standard cubic feet of gas was produced during the year, with the volume about 8.96 percent lower than the 3,013,634mmscf produced in 2020. Total gas utilized in 2021 stood at 98 percent, while 2% could not accounted for by the companies based on the templates submitted.With the nation’s gross domestic products put at about $434.17bn, the report said the oil and gas sector contributed about 7.24 percent to the GDP and $ 36.55 billion (N14.40 trillion Naira) to total exports of $ 47.31 Billion (N18.91 trillion). This represented 76.22 percent of the total exports in 2021, 0.8% higher figure than in 2020. 19,171 employees were said to be working in the sector in 2021.Read also Nigeria lost N16.25trn to oil theft from 2009 to 2020 – NEITISimilarly, the total government revenue generated in 2021 was 10.75 trillion Naira to which the oil and gas sector contributed 4.358 trillion Naira. This represents about 40.55 percent of the total revenue compared to 51 percent in 2020. The higher export value in 2021 compared to 2020 was due to the increase in crude oil price in 2021 from $41.65 per barrel to $66.97 per barrel, the NEITI report disclosed.NEITI also reported on the 2020/2021 marginal fields awards. It observed that NUPRC regulation expected all successful applicants whose names were in the Notice of Preferred Bidder Status to make payments for signature bonus prior to award. However, the report observed that the list of awardees contained names of companies that had not paid signature bonuses, with four companies whose names were not on the list of awardees making payment of signature bonuses.NEITI in the 2021 report also observed that majority of the oil and gas companies in Nigeria exhibit complex structures that shield the real identities of their owners, thereby limiting the impacts of efforts at beneficial ownership disclosures. NEITI called on the NUPRC to implement fully the relevant sections of the PIA on Beneficial Ownership reporting.Other copious recommendations made by NEITI in its 2021 report are that NNPC should transparently disclose details of the subsidy and the beneficiaries of the payments, render accounts on project eagle loans transaction and review and investigate all pre-export financing arrangements and other loan arrangements done in exchange for the nation’s crude oil and gas.NEITI also recommended that Government should commission a comprehensive audit of the PMS subsidy-related financial transactions between NNPC and the Federation, determine all liabilities and ensure accurate and verified data.Furthermore, the Agency noted the discrepancies in records by some relevant government agencies on transactions in the sector. It says it raises concerns about the integrity and accuracy of the data and pieces of information disclosed by these agencies. It therefore called on the concerned agency to improve its data management processes and establish controls that would prevent future discrepancies and maintain data integrity.NEITI also drew attention to the practice of computing 13 percent derivation on the balance of revenue after deductions from the total collections which it advised should be discontinued. Rather, the 13 percent derivation should be based on total collections for the relevant period in accordance with Section 162(2) of the constitution of the Federal Republic of Nigeria.Senator George Akume, the Secretary to the Government of the Federation, represented by the Permanent Secretary, Political and Economic Affairs . Esuabana Nko while unveiling the report reaffirmed the federal government’s commitment to support and deepen the implementation of the EITI in Nigeria.Benson Agadaga, Chairman Senate Committee on Oil and Gas Host Communities, Benson Agadaga, reaffirmed government’s commitment to implement the recommendations of the NEITI oil and gas report. “Be assured that the Federal Government will carefully study this important report and adopt it as a valuable working document as part of our overall reform programme for the oil and gas sector”, Sen. Agadaga stated. 0 comment 0 FacebookTwitterPinterestEmail admin Follow Author previous post AMCON recovers 70% of bad debts next post Quits Aviation refutes reports of tampering with Adeleke’s aircraft engines You may also like Stephen A. Smith vs. Terrell Owens feud, explained:... September 21, 2023 Bookmark Sport | Cape Town Spurs plunge deeper into... September 21, 2023 Bookmark News24 | ANC defeats bill DA proposed as... 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