How Nigeria’s regulatory agencies aid oil revenue fraud

How Nigeria’s regulatory agencies aid oil revenue fraud – NEITIAccording to NEITI through the agencies’ inadequate capacities to appropriately verify and compute revenue accruable to the government, the country has lost several billions of oil revenue to fraudulent companies and individuals in her oil and gas sector.

Speaking at a media workshop in Abuja, the Executive Secretary of NEITI, Mr. Waziri Adio, said: “NEITI reports also exposed inadequate capacity of the relevant regulatory agencies to confidently verify royalty and petroleum profit tax computations prepared by companies.”

He added: “”These deficiencies revealed by NEITI in all of its audits have over the years cost the Nigerian federation dearly. They were key sources of waste, fraud and monumental corruption.”

Adio thus explained that the NEITI’s audit reports could address some of Nigeria’s poor governance and revenue management issues if all the issues identified in its audit reports were adequately considered.

Although he did not mention some of the regulatory agencies that could be guilty of this, but government agencies such as the Department of Petroleum Resources (DPR), and Federal Inland Revenue Services (FIRS) are some of the agencies responsible for government revenues in the sector.

Similarly, Adio expressed NEITI’s worry over the failure of the National Assembly to pass the Petroleum Industry Bill (PIB) after several years of its existence in the legislative chambers.

The PIB was first sent to the National Assembly by the administration of former President Olusegun Obasanjo. However, successive sessions of the parliament had failed to pass it due to disagreements over fiscal components of the draft and demands for provisions for host communities.

Adio however said the passage of the bill which would replace the existing Petroleum Act would benefit the country in its quest to maximise revenue from the sector.

He was represented by NEITI’s Director of Finance and Accounts, Mr. Donald Tyoachimi, and said the failure to also implement one of the key recommendations of its past audit report for the provision of metering infrastructure at wellheads in oil and gas fields was hurting the industry in terms of revenue generation.

He however pointed out that Nigeria has benefited a lot from the implementation of the Extractive Industries Transparency Initiative (EITI) process in the country.

“It is gratifying to note that NEITI reports have become major instruments leading the on-going massive reforms in the sector. For instance, all NEITI recommendations since 1999 are now leading the reforms.

“These include NEITI recommendations for the re-structuring of the NNPC, removal of fuel subsidy, cancellation of SWAP/OPA and Federal Government’s exit from JV cash calls. In addition, there has been a clear directive on the remittance of NLNG dividends directly to the federation account,” said Adio.

He added that: “A close look at the NEITI reports from 2000 to 2014 showed unremitted NLNG loans and interest repayments to the tune of $15.8 billion. Our other recommendations that are being implemented include the review of all expired MoUs and agreements in the oil and gas sector which in the past has led to huge losses of revenues to the Federation.

“NEITI is worried that the issue of the PIB and metering infrastructure in the sector among other issues are yet to be addressed.”

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