Oil theft losses from the Niger Delta region estimated at about N3.8 trillion in 2016 is higher than the combined budgetary allocations to both the education and health sectors for the year 2018.
According to a report commissioned by the Nigeria National Resource Charter (NNRC), the combined allocations of both sectors amount to N189.4 billion, which is a measly 8.4 percent of the total value of the losses experienced in the oil sector within the last two years.
The report indicates that those losses arose from crude oil theft, sabotage and pipeline vandalism, principally as a result of the force majeure declared at the Forcados terminal, combined with wider pipeline infractions and theft. The government’s share of this loss was approximately 42 percent or about N1.6 trillion.
The Nigeria Natural Resource Charter (NNRC), a non-governmental organisation, provides policy options to guide governments and societies in their use of natural resources for maximised and sustain returns for citizens.
In the light of the report, ‘Oil Theft in Nigeria,’ the NNRC urges the Federal Government to address oil theft with the urgent attention it deserves and intervene with more effective action.
The report focuses on the consequences of weak governance structures on the Nigerian economy and the Nigerian people. It also provides credible information on revenue losses from oil theft and its impact on the economy and the average Nigerian.
The report notes that though oil theft has been a nagging problem in the sector, it was relatively insignificant until the 1970s, which saw an increase in pilfering level. It eventually evolved into a budding cottage industry on the basis of rising oil prices, which rose to as much as $100 a barrel in the early 2000s, causing consequential socio-economic problems.
Oil theft has recorded an unprecedented growth over the last decade peaking between 2011 and 2014.
The NNRC report also identifies several factors responsible for the emergence of oil theft in Nigeria over the years from poverty level, unemployment, poor governance, corruption to the disenfranchisement and neglect of the people of the Niger Delta region.
Focusing on the consequences that weak government structure has on the Nigerian economy and people, the report also provides credible information on revenue losses experienced in the oil sector and its resultant effect on the average Nigerian.
An observation made in the report notes the record budget for the fiscal year 2018, which stands at N9.12 trillion with a revenue target of N7.2 trillion, most of which is expected to be derived from the petroleum sector.
The inability of the government and oil companies to curb this menace therefore poses a major threat to the economy, taking into account the recent recession, rising debt and fragility of the economy as a whole. In light of the report, reducing oil theft should be made a priority and addressed in an effective and swift manner.
Concluding the report based on the assessment of three petroleum sectors and published in its 2012, 2014 and 2017 Benchmarking Exercise Reports (BERs), Nigeria’s policies, legal and institutional frameworks have remained incapable of addressing the revenue losses and attendant environmental damage holistically and sustainably.
It also described the current techniques adopted by the government to curb oil theft as “unsustainable and inadequately implemented” and advocates for the implementation of alternative strategies which are “robust, backed with political will and take a long-term view”.
Urging the government and other relevant stakeholders in the sector to reconsider their current strategies at combating oil theft, the report proffers solutions and effective strategies for addressing oil theft in a sustainable manner.
*Source: Businessday
