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  • Oil & Gas - News
  • Updated: November 14, 2023

NEITI reveals how much Nigeria owes in gas flare penalties

NEITI reveals how much Nigeria owes in gas flare penalties

The Nigerian Extractives Industries Transparency Initiative (NEITI) has revealed that overdue gas flare penalties in Nigeria amount to $828.8 million and unpaid gas royalties amount to $559.8 million.

During his opening remarks at the 2nd German-Nigerian Symposium on Green Hydrogen in Abuja on Monday, November 13, Orji Ogbonnaya Orji, the Executive Secretary of NEITI, stated as much.

Despite the nation's position as a significant worldwide gas producer, he emphasised the risks associated with ongoing gas flaring operations, which the nation might instead use to further its Decade of Gas programme.   

He said that the unreconciled numbers in the NEITI report for 2021 indicate that there is $559.8 million in unpaid gas royalties and an additional $828.8 million that has not been remitted that is associated with overdue gas flare penalties.

This implies that a sizable volume of petrol was flared inside the allotted time frame without any associated payments, which presents serious obstacles to the worldwide zero emissions project.  

Remember that in July 2023, Hon. Tajudeen Abass, the Speaker of Nigeria's Federal House of Representatives, disclosed that the nation loses $2.5 billion a year as a result of gas flaring.

He underlined that the gas that was flared represented money that could have been made by selling or using it.  

In order to look into the payment of fines and the handling of earnings, Hon. Abass demanded that the Ad-hoc Gas Flaring Committee include all parties involved in gas flaring activities.

Furthermore, the House was notified by Patrick Mgbebu, the Chairman of the Revenue Mobilisation Allocation and Fiscal Commission's (RMAFC) Gas Monitoring Committee, that the Federation Account had lost out on almost $277 million in gas flaring fines between 2020 and 2022.  

Dr. Markus Wagner, the Country Director of GIZ Nigeria & ECOWAS, spoke at the event and said: 

“It is crucial to recognize that green hydrogen has the potential to revolutionize our energy landscape. It offers a path to reducing carbon emissions, diversifying energy sources, and boosting economic growth.” 

Additionally, he underlined how crucial knowledge and statistics are to enabling Nigeria to successfully transform its energy supply. To successfully manage the shift, careful preparation, close observation, and assessment of the implementation plans are essential components.  

He advised Nigeria to establish itself as a leader in technology in order to take full advantage of the prospects brought about by the energy revolution.

Furthermore, the Director of Gas, Komolafe Oluremi, on behalf of Nigeria's Minister of Gas, Ekperikpe Ekpo, commended the country's commitment to attaining Net Zero Emission by 2060.  

Ekpo emphasised that the Ministry of Petroleum Resources has made hydrogen a key priority since it provides a workable route for decarbonizing the nation's energy industry.

He underlined that significant investments are required to expand the hydrogen economy and that the government can help by fostering an environment that is welcoming to investors. 

The Federal Republic of Germany's ambassador to Nigeria, Annett Günther, reaffirmed the countries' shared commitment to spearheading hydrogen production and use.

This partnership demonstrates a common commitment to promoting projects pertaining to hydrogen. 

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