The Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) has revealed that Nigeria’s Federation Account was short changed $277million between 2020 and 2022.
The RMAFC Chairman, Gas Monitoring Committee, Mr. Patrick Mgbebu disclosed that the gas flare penalty payment regime from 2013-2018 (2018 Jan-June) was US$0.30, while from 2018 (July-Dec) to 2023 It is pegged at $2.00.
Mgbebu noted that within the period in question, the Federation Account was shortchanged.
“The penalties payable amounted to $3,465,299,226.55 and the value of gas would have been $12,403,000,001.20 if the gas was sold and not flared,” he disclosed.
“The Commission compared the data from NOSDRA with the data from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the following observations were made; that the volume of gas flared according to National Oil Spill Detection and Response Agency (NOSDRA) and NUPRC were 838,667,211 Mscf and 700,975,019 Mscf respectively. The difference which is 137,692,192 Mscf indicated that the Federation Account was shortchanged. It should be noted that the comparison covered three years from 2020 to 2022.
“That the value of gas flared according to NOSDRA and NUPRC are $320,583,355.48 and $43,325,050.76 respectively. As such the variance Indicated that the Federation Account was shortchanged by $277,258,304.72,” he disclosed.
He lamented that Nigeria has a proven gas reserves of 201 trillion standard cubic feet and unproven gas reserves of 600 trillion standard cubic feet, yet production of gas remains very low and unstable.
In his presentation, Director General, NOSDRA, Mr. Idris Musa, noting that the extant penalties on gas flaring are to serve as deterrent, submitted that the penalties on gas flaring should be stiffened.
While stressing the need for improvement on the penalty application process and procedure of the application and collection, he harped on the need to abolish the dichotomy of penalty administration.
According to him, a total of 3.8 billion Mscf was flared between 2013 to date while total sum of $7.6 billion penalties are payable.
