Stakeholders worry over crude theft, allege compromise

Stakeholders have raised concerns over the growing rate of crude oil theft in Nigeria, insisting that dealing with such a problem should not be rocket science as being painted in the country.

Executive Secretary of Nigeria Extractive Industries Transparency Initiative (NEITI), Ogbonna Orji and foremost lawyer, Femi Falani, while speaking at an Experts Validation Meeting organised by Human Environmental Development Agenda (HEDA), stressed the need for the country to do everything possible to address theft and vandalism of oil and gas facilities.

Noting that figures from NEITI between 2009 and 2020 audit had put Nigeria’s losses to crude oil theft over a 12-year period at 619.7 million barrels valued at $46.16 billion or N16.25 trillion, Orji noted that from 2009 and 2018, the country lost 4.2 billion litres of petroleum products from refineries valued at $1.84 billion.

He equally decried the nation’s fuel subsidy bill, adding that NEITI oil and gas reports and other indices by the relevant agencies showed that subsidy is no longer sustainable and must be removed.

“In April 2022, the National Assembly passed the 2022 supplementary appropriation and increased the subsidy budget by 700 per cent to N4 trillion. The 2023 figures are even higher.

“The allocation to subsidy reflects the increasing and mounting cost of financing fuel subsidy in Nigeria.

“Between 2005 and 2021, Nigeria spent N13.7 trillion to finance fuel subsidies. This amount would have revolutionized Nigeria’s energy (power and downstream petroleum) sector, making the country a net exporter of refined petroleum products with its far-reaching impact on the economy beyond the downstream petroleum sector,” Orji said.

Orji insisted that the effective cost of financing subsidy is significantly more than the cumulative subsidy budget or the opportunity cost of subsidy spending.

The Executive Secretary said the combined effect of fuel subsidy and product importation is responsible for a large part of Nigeria’s current economic challenges including low GDP growth in the petroleum sector, foreign exchange and balance of payments problems and a worsening debt profile.

Orji said: “Given this reality, neither government nor other stakeholders can continue to ignore the severe danger that fuel subsidies pose to the economy and the future of the country.”

Falana said that the rising crude oil theft remained a demonstration of incompetence on the part of a government anywhere in the world that is unable to cage thieves, smugglers and others.

According to him, no government or oil producing country complains about oil theft like Nigeria does, adding that while other countries have adopted solutions such development is lacking in Nigeria.

Falana said: “Every oil producing country has acquired the equipment for calculating how much oil is produced daily. The Minister of State petroleum came out with a lot of joy and excitement that we have decided to stock an equipment for monitoring the volume of crude oil and fuel being taken to anywhere in the world.

“The application had N17 billion approved for it. Currently, there’s a need for clearance as to where that money is; we have written to the appropriate agencies to have evidence of the installation of the application. The information I have now is that there was no acquired application due to the diversion of the allocated fund. So I’ve taken the situation to the EFCC for investigation.

“Secondly, in January 2020, this government announced to the whole world that it was going to adopt CNG (compressed natural gas). The Minister of State for Petroleum then announced that a litre goes for N95-N97 and that the government was going to encourage the migration of vehicles from PMS to CNG.

Shortly thereafter, about N250 billion was allocated for the conversion of vehicles by convenience and an amount of about 10,000 vehicles are currently running on CNG. This is cheaper and more eco-friendly.

Again, the government has abandoned that project. What happened to the N250 billion? The Central Bank of Nigeria has not written back and when the information is available, we’ll soon make it available.”

Falana, who noted that he participated in a group that traces stolen oil along with an international company with a record of the movement of oil vessels all over the world on a daily basis said the manner in which the country is losing crude oil is worrisome.

“So, this lawyer contacted me to work with them and we discovered between 2011 and 2014, a Philadelphia port in America received oil stolen from Nigeria, discharged in that country by those ships and oil companies. The oil received has to be recorded because of taxation unlike here in Nigeria where there is no authentic accountability.

“So when the record says 50,000 litres, it could actually be 120,000. So the difference between what was recorded in Nigeria and what was recorded at the port in Philadelphia, America was 60.2 million barrels valued at $12.7 billion. Another port in Texas and a group of Nigerians, this one was even in the House of Representatives they came to the figure of $17 billion.

“The government has been unable to give us the free hands to pursue the well-known oil and shipping companies. In frustration, we have gone to the Federal High Court but as usual, there are objections that will go to the Court of Appeal and the Supreme Court,” Falana said.

Falana said the revelation on the oil being stolen from the country would be disturbing if searches are conducted in ports across the world on oil stolen from Nigeria.