Nigeria Earns N22.2 Trillion from Oil Sector in Three Years

 Finance Minister, Dr. Ngozi Okonjo Iweala An independent audit report of financial flows into the Federation Account from operations in the oil and gas sector has revealed that a total of N22.165 trillion ($143.5 billion) was earned as revenue from the sector from 2009 to 2011. The audit, among others, revealed that the total accrual was four per cent short of the $148.8 billion earned by the country from the sector from 2006 to 2008. The oil and gas industry audit, which was commissioned by the Nigeria Extractive Industries Transparency Initiative (NEITI) in line with its mandate for the period 2009 to 2011, was Thursday presented to the public in Abuja. The audit, which was for the first time undertaken by an indigenous accounting and auditing firm, Sada Idris & Co, showed that proceeds from the sale of equity crude, royalty, signature bonus, concession rentals, gas flaring penalties, Petroleum Profit Tax (PPT) and companies’ income tax contributed to Nigeria’s earnings from the sector. The audit was concluded in nine months. Other areas that contributed to these earnings included earnings from Pay As You Earn (PAYE), Value Added Tax (VAT), dividends and repayment of loans by the Nigerian Liquefied Natural Gas (NLNG), contributions to the Niger Delta Development Commission (NDDC) and the Education Tax Fund (ETF). While presenting the audit report, Chairman of the National Stakeholders Working Group (NSWG) of NEITI, Mr. Ledum Mitee, said the financial audit had equally delved into the management of the controversial fuel subsidy scheme in which it discovered that the Nigerian National Petroleum Corporation (NNPC) had claimed a total of N1.40 trillion as subsidy payments directly from proceeds from domestic crude sales before remittance to the Federation Account. Mitee stated that the report found out that subsidy payments claimed by the NNPC had increased by 110 per cent, that is, from its claims of N198 billion in 2009 and N416 billion in 2010 to N786 billion in 2011. The report further showed that NNPC owed the federation N1.3 trillion from unremitted crude oil sales in the three-year period.  An NNPC spokeswoman said the firm could not comment on the findings because it had not seen the report yet, Reuters reported Thursday. “From this report, the total financial flows to the Federation Account from the oil and gas sector from 2009 to 2011 were $143.5 billion. This amount is made up of proceeds from the sales of equity crude, royalty, signature bonus, concession rentals, gas flaring penalties, PPT and companies income tax. “A breakdown of these earnings shows that sales of crude oil and gas within the period under review amounted to $81.9 billion and the total revenue that accrued to government from PPT, royalty, signature bonus, gas flaring penalties and concessional rentals amounted to $45.7 billion. “Also, revenue from companies’ income tax, VAT and withholding tax within the two-year period amounted to $6.1 billion, while $4.8 billion was reported as revenue from dividends and repayments of loans by NLNG. “From the report, the total revenue flow to states arising from withholding tax and PAYE was $1.5 billion, while the total revenue flow to other entities arising from the contributions to NDDC and ETF was $3.2 billion. “The total financial flows represent a decrease of four per cent from what government earned in the sector in 2006-2008 when compared to total flows of $148.8 billion as against the reported government earnings of $143.5 for the period 2009-2011.