Latest figures from the Federal Government indicate a worrisome increase in crude oil theft in Nigeria. The crime is now apparently a pastime of big-time oil theft syndicates operating freely in the country with the assistance of highly placed Nigerians. Minister of Petroleum Resources, Mrs. Diezani Alison-Madueke, explained last week that Nigeria lost a whopping N1.29 trillion in revenue to industrial scale theft of crude oil and production shutdowns, last year. This colossal loss, the minister said, is based on the average daily volume of 215,000 barrels estimated at $21.5 million (about N1.3billion) at $100 barrel. So much revenue is lost to system leakages and deferred production, largely as a result of pipeline vandalism.
However, government should now go beyond announcements of how much Nigeria is losing to oil theft and summon the political will to deal with the barons behind this serious economic crime. It is disheartening that crude oil theft has become a thriving and well-organised crime, yet the government has not been seen to have done much to stop it over the years. Nigeria was recently listed as a leading country in oil theft among oil-producing nations in the world. There is, therefore, a need for a decisive policy to stem this crime that has become a great danger to the nation’s economy. The National Assembly should make stiffer laws against oil theft in the country.
Stealing of crude oil has made nonsense of the projected revenue of government, and therefore requires urgent measures to stop it. For instance, last year, the Coordinating Minister for the Economy and Minister of Finance, Dr. Ngozi Okonjo-Iweala, stated that Nigeria loses about 300,000 barrels per day to oil thieves. This translates to over $1billion (more than N160 billion) per month.
In a similar vein, the Nigerian National Petroleum Corporation (NNPC) revealed that the nation lost $1.23 billion (about N190 billion) in the first quarter of 2013, while figures from Shell Petroleum Development Company (SPDC) put the amount lost to oil theft at N965 billion annually.
These figures are huge, indeed. The financial loss constitutes a drain on the nation’s revenue. No wonder, revenue accruing to the three tiers of government from the Federation Account has fallen drastically in recent months.
While we support the introduction of stiffer penalties to deter oil theft, it is glaring that the crime is flourishing because the government has not been seen to be seriously prosecuting suspects. It is important that oil thieves are seen to be punished for the crime.
Besides, government should do more to secure pipeline infrastructure across the country. At present, we have been told that an average of 300,000 bpd is stolen from pipelines and other facilities. This is in addition to another 174,000 bpd lost to shutdowns related to theft and other third party interference. The sustenance of crude oil production at the projected 2.3 million bpd is being threatened due to lack of monitoring of oil facilities.
To move the nation’s oil sector to the next level and meet local and international demands, government should be committed to ensuring that policies that are meant to address oil theft and related crimes such as pipeline vandalism and bunkering are properly considered and implemented.
We are surprised that government is yet to implement the National Production Monitoring System that will check malpractice in the oil sector. The system, which was announced last year by the Petroleum Minister, is a technology-driven, non-intrusive surveillance mechanism that should check losses in the oil sector. Every measure that can help to check the nefarious activities of oil thieves is welcome, so that we can strengthen accountability in this critical sector of the economy.
Beyond the periodic reeling out of statistics on losses of revenue to oil theft, the government should demonstrate strong will to check the crime. If properly checked, the amount Nigeria loses to oil theft can go a long way in meeting the nation’s needs and funding the war against terrorism, instead of the quest for external borrowing by the Federal Government.