BudgIT demands actions from oil &gas regulatory bodies over industry prudence

Temitope Adebayo

Following the release of the audit report of the oil and gas industry for 2016 by the Nigeria Extractive Industries Transparency Initiative (NEITI), BudgIT has demanded that the industry regulatory bodies stepped up performance over fiscal prudence. NEITI, a body that shoulders the task of improving transparency and accountability in the management of revenues from natural resources, while BudgIT is a civic organization that applies technology to intersect citizen engagement with institutional improvement, to facilitate societal change. The civic group, which gave this charge in a document obtained by The Daily Times, stated that its position on the need for improved revenue reporting was based on critical assessment and analysis of the sector. Specifically, BudgIT reported that there were three cases of under-remittance in the first quarter of 2016 in which unit prices and crude values on the sales invoice were higher than the recorded figure in the sales profile, amounting to an aggregate revenue loss of $7.82 million. In addition, the CSO stated that from its analysis, this revenue loss could be used to build and equip almost 500 hospitals in oil-rich but devastated communities in the Niger Delta region. Similarly, the group in a statement issued by its Communications Associate, Shakir Akorede, on the report findings alleged that the NNPC failed to apply market rate as advised by the CBN to convert the sales proceeds received in US dollars for domestic crude sales. BudgIT pointed out that this failure resulted in a revenue loss of N260.43 million while an under-remittance of N4.02 million was also observed in 2015 due to similar practices. Similarly, the group also found that losses arising from crude oil theft and sabotage in the upstream and downstream sectors amounted to $869.02 million and $3.55 billion respectively. This is even as it reported that in 2016, 23 companies incurred a liability of $3.63 million on gas flare penalty, an amount which, it noted, could be expended on four research and development (R&D) projects in the oil and gas sector. Worried by unwholesome losses, BudgIT called on all entities that had been identified with outstanding issues to resolve them immediately as some of the issues have not only persisted but have also escalated over the years. Commenting on the report findings, BudgIT’s Principal Lead, Gabriel Okeowo, said: “We are charging all regulatory bodies of government to wake up to their responsibilities in ensuring compliance with the rules of engagement. “If properly structured back into the economy, the huge amount that goes down the drain, courtesy of these issues, will go a long way in contributing to the economic recovery and growth plan of the federal government”, he added.