Nigeria Gets $62.9 Billion Oil Revenue

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Ledum Mitee, NEITI Chairman

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The Nigeria Extractive Industries Transparency Initiative, NEITI, says $62.9 billion accrued to the country as revenue from oil in 2012

By Fidelia Salami  |  Apr. 20, 2015 @ 01:00 GMT  |

Nigeria earned $62.9 billion as oil revenues in 2012, according to the Nigeria Extractive Industries Transparency Initiative, NEITI, 2012 oil and gas audit report. The audit report which was released recently said that a breakdown of the revenue profile of the country showed that $30.3billion was realised from sales of crude oil and gas compared to $26.9billion earned from taxes, royalties and rents while $5.6 billion was revenue flow to states, local governments and other entities.

The total earnings for the period is lower than $68.4 billion earned by the country in 2011, representing a revenue decline of 8 percent. The aggregate unresolved difference with respect to all the financial flows in 2012 is $47.5 million representing 0.075 percent of total financial flows from all sources when compared to 0.14 percent recorded in 2011. The report explained further that the figure represented 0.075 percent of the total financial flows from all sources, when compared to 0.14 percent recorded in the preceding year. The disclosure is part of the highlights of the Independent Audit Report of the Oil and Gas sector for the year 2012 released on March 30, by NEITI.

The report also said that out of the accrued revenue, about N1.3 trillion was processed for payment as subsidy to oil marketers, a figure that showed a difference of N400 billion from the actual the sum of N690 billion paid during the period.  The total of 862.7 million barrels was also disclosed as fiscalised crude oil production at an average daily production of 2.36 million barrels per a day. The Report made incisive disclosures on quantity of crude either stolen or lost   due to vandalism and other operational disruptions in 2012.

The Oil and Gas Audit for the year 2012 was commissioned in May 2014 by NEITI as part of its national and global mandate in the implementation of EITI in Nigeria. The exercise covered financial, physical and process issues under the new EITI Standards. The 2012 oil and gas industry audit was the fifth in NEITI’s cycle of audits in the oil and gas sector since it started operating in 2004 as a member of the global EITI. The previous audits covered the periods 1999-2004, 2005, 2006-2008 and 2009-2011.

Meanwhile, daily subsidy payments on fuel by the federal government dropped from N1.4billion to N1.2billion between March and April, this year as a result of a slight fall in the prices of crude oil. Unlike March when the average price of crude hovered at about $60 per barrel, the price of the commodity currently stands at over $50 per barrel, meaning that refiners, who pass the costs to consumers, spent less to procure and process petroleum products, including petrol.

Based on the domestic need of about 40 million litres daily, government is expected to spend about N31.65 as subsidy per litre in April, 2015.

The Petroleum Products Pricing Regulatory Agency, PPPRA  confirmed the situation in its latest template which puts the landing cost, including cost and freight, traders margins, lightering expenses, Nigerian Port Authority, financing, jetty depot thru put charge and storage at N103.16 per litre.

The agency puts distributors’ margins, including retailers, transporters, dealers, bridging fund, marine transport average and admin charge unchanged at N15.49 per litre, thus amounting to N118.65, while the ex-depot price and subsidy at N77.66 and N31.65 respectively, before arriving at the regulated price of N87 per litre.

The PPPRA had put the landing cost, including cost and freight, traders margins, lightering expenses, Nigerian Port Authority, financing, jetty depot thru put charge and storage at N106.73 per litre in March, this year, adding that distributors’ margins, including retailers, transporters, dealers, bridging fund, marine transport average and admin charge unchanged at N15.49 per litre.

This amounted to a total cost of N122.22, showing an increase of N23.04 higher than the February, 2015 total cost.

Investigations showed that the Federal Government’s fiscal situation had been worsened by the devaluation of the naira, which indicated that marketers needed more local currency to import fuel.

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