Nigeria loses N5tn annually to oil theft, others

Crude oil being illegally transported in the Niger Delta
| credits: Nigerianbulletin.com

The Chairman and Chief Executive Officer, Nigerco Nigeria Limited, Mr. Yabagi Sani, on Wednesday called on the incoming administration of Muhammadu Buhari, to come up with policies that would help save the country annual operational losses of $25bn (about N5tn) from the oil and gas sector.

He said the losses were being incurred through crude oil theft and non-adherence to principles and standards as stipulated in the Weights and Measures Act.

Yabagi’s firm is currently implementing the legal metrology system in Nigeria on behalf of the Weights and Measures Department of the Ministry of Industry, Trade and Investment.

Addressing journalists in Abuja as part of activities to celebrate this year’s World Metrology Day, he said implementation of legal metrology in the oil and gas sector of the Nigerian economy would help reduce the massive corruption in the sector.

Yabagi said in view of the dwindling oil revenue from the oil and gas sector, strict adherence to principles and standards of weights and measures were fundamental for the growth of any economy.

However, he regretted that since 2013, there had been a lot of slack and ineffectiveness in the enforcement of the legal metrology law in the various sectors of the economy particularly the oil and gas sector.

Giving a breakdown of the $25bn, he said transactions at both the export and import terminals, which usually result in error margin of between three per cent and 17 per cent, could lead to an estimated loss of $7.47bn.

In the same vein, he said the sum of $17.4bn was being lost to crude oil theft.

Yabagi said, “Implementation of legal metrology in the oil and gas sector will establish the culture of rule of law in business transactions in this very vital sector of the economy.

“In view of the progressively dwindling revenue from oil and gas, strict adherence to the principles and standard of weights and measures practices are fundamental as inaccurate measurement system short-changes economies of revenue due to it.

“For instance, transactions at both the export and import terminals resulting in error margin of between three and 17 per cent can lead to an estimated loss of $7.47bn per annum.

“Concrete efforts by the incoming administration in the sector will, in practical terms, save Nigeria annual operational losses of $25bn made up of an estimated $7.5bn per annum attributable to the 10 per cent error margin, which is usually occasioned by indirect losses due to measurements not controlled by legal metrology, plus the annual crude oil theft of $17.4bn.”

He called on all regulatory agencies of government to assist the incoming administration by allowing full compliance with the implementation of the legal metrology system in Nigeria