Tinubu’s energy panel reveals Nigeria lost $56 billion to oil theft, subsidy

According to the panel which was set up before President Tinubu was inaugurated, $46.16 billion was lost to crude oil theft while $10.7 billion was lost annually to petrol subsidies during the same review period.

Apart from the losses incurred from the challenges of oil theft in the petroleum industry, the council further revealed that the absence of the Petroleum Industry Act – PIA further led to losses worth $70 billion since 2011.

The report also highlighted Nigeria’s dwindling economic fortunes with its Gross domestic product ratio which is currently at 7% making it among the five lowest in the world.

Part of the report read in part, “Insecurity is a major sector challenge. $46.16bn was lost to crude oil theft between 2009 and 2020. $10.70bn lost annually to PMS subsidy and inefficiencies associated with the purchase, distribution, and sale of PMS.

“Governance and regulatory concerns have eroded investor confidence, diverting private capital needed for the development of critical oil and gas infrastructure.”

The panel also advised the new President to fix some very important aspects of the country’s economy separating them into zero – 100 days target and 18 – 24 months targets.

For the targets to be met during President Tinubu’s first 100 days, the panel advised on the need to consider fixing some of the issues which include:

• Force the merger of the exchange rate window, 
• Restructure the Nigeria Upstream, Midstream and Downstream Petroleum Regulatory Commission.
• Recruit competent and experienced technocrats in the Nigerian National Petroleum Company Limited (NNPCL) to make sure the entity functions as a commercial entity as prescribed by the PIA (Petroleum Industry Act)
• Deregulate PMS pricing and implement Federal Direct Cash Transfer Programme. 

On the issues to be resolved during the President’s first 18-24 months, the following was suggested:

• Instruct the NNPCL and NUPRC/NMDPRA to close out outstanding divestments and contract issues for project delivery clarity.
• Merge the NUPRC, NMDPRA, and NCDMB into a single regulator.
• Expand domestic gas reserves, and promote the development of a diversified oil and gas industry by implementing stated reforms in the PIA.
• Develop a sustainable financing model, and facilitate a third-party gas pricing framework for the export market.
• The formulation of fiscal enablers for natural gas and deepwater via the Finance Act, and expand stabilisation in the PIA to cover full credit for post-FID (final investment decision) levies and taxes.