Nigeria losing $150m annually to untaxed crude oil profits

Energy Reforms Advocates (ERA) has alleged that Nigeria is losing over $150 million annually due to non-payment of tax by oil firms on crude oil profits.

ERA blamed what it termed an “unholy alliance” between the Nigerian National Petroleum Company Limited (NNPCL), local and international oil firms for the alleged infraction.

The group noted that the brazen exploitation not only undermines Nigeria’s economic interests but also raises serious concerns about corruption and money laundering in the country.

“Given oil’s status as Nigeria’s primary revenue source, this flagrant exploitation has far-reaching consequences, impacting every sector of the country. The ripple effects of this malfeasance are felt across the economy, exacerbating financial hardships and undermining national development,” it noted.

ERA alleged that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is culpably complicit in the illicit operations, willfully disregarding its statutory responsibility to ensure the quality of petroleum imports.

By failing to regulate fuel quality effectively, it claimed that NMDPRA has created a regulatory vacuum that international commodity traders and Nigerian marketers have exploited with impunity, importing subpar fuels without consequence.

Lamenting the situation, ERA noted: “As Africa’s largest oil producer, Nigeria’s economy is heavily reliant on crude exports and the accompanying revenues. However, these illicit dealings deprive the country of vital funds that could be invested in critical infrastructure, education, healthcare, and essential public services.

“The actions of these unpatriotic elements in power have far-reaching and devastating consequences, severely impacting various aspects of Nigeria’s development, including its economic, social, infrastructure, political, and humanitarian well-being.”

With a great insight into the understanding of this situation as a syndicate operation involving high-profile corrupt individuals, ERA called on relevant authorities, notably the Economic and Financial Crimes Commission (EFCC), to initiate a thorough investigation into these illicit activities and prosecute all individuals and organisations implicated.

The advocacy group is also demanding enhanced transparency in the Nigerian National Petroleum Company Limited’s (NNPCL) crude oil allocation processes and more stringent oversight of the nation’s oil export channels to prevent further exploitation.

In response to these disturbing findings, Energy Reforms Advocates are pressing the Nigerian government to conduct a comprehensive review of all crude oil export contracts, ensuring that companies like Matrix Energy and Gulf Transport & Trading (GTT) are held accountable for their actions.

The group is stressing the imperative need for sweeping reforms in the oil and gas sector, specifically targeting the pervasive exploitation by foreign entities in collusion with corrupt Nigerian officials.

“This constitutes a systematic plundering of Nigeria’s resources,” declared a spokesperson for ERA. “We can no longer tolerate the inaction that enables a select few privileged companies, in cahoots with corrupt officials, to siphon away our nation’s wealth. The time has come for decisive government intervention.”

ERA urged Nigerians to remain vigilant, demanding the transformative change desperately needed in this critical sector.