Nigeria loses 200,000 barrels of oil daily to crude theft, says NGF

The Nigeria Governors Forum (NGF) has said the nation loses 200,000 barrels of oil daily to oil theft.

Chairman of the forum and Ekiti State Governor, Kayode Fayemi, made the revelation at a meeting between the leadership of the NGF and the new management of the Nigerian National Petroleum Corporation (NNPC) in Abuja.

According to the governor, besides the fall in oil price and production, some of the challenges that have compounded instability in the market include the impact of cash call obligations and accumulation of liabilities.

He added that about 500,000 barrels daily were deferred in production shut-ins.

Fayemi maintained that the extant laws for production sharing contracts (PSCs), which limit royalties and tax, were also a challenge to the stability of the industry.

Stating that the growth and steadiness of the sector have a significant bearing on governors’ plans, he added that the nation had witnessed a period where monthly allocation from the Federation Account Allocation Committee (FAAC) peaked at N1.1 trillion (June 2014), and regrettably in May 2016, the three tiers of government shared just over N289 billion.

Fayemi said subsidy remained a major setback to government revenues, canvassing a way out.

This, the Ekiti chief executive insisted has become necessary given the low oil revenues and other commitments.

He said: “We believe that at the current course, subsidy costs will continue to offset any recovery in the oil market. The country recorded one of its lowest costs of subsidy in 2016 when oil traded at an average of $48.11 per barrel.

“Total subsidy that year was around N28.6 billion, but the amount rose to N219 billion in 2017 and N345.5 billion by mid-2018, as the price of oil and domestic PMS consumption rebounded.”