Dr. Ibe Kachikwu, Nigeria’s Minister of State for Petroleum Resources, has said the Federal Government loses between $500million and $1billion yearly to gas flare data falsification in the country.
Kachikwu spoke yesterday at the Gas Competence Seminar in Abuja, which had the theme “Towards ending gas flaring and unlocking gas potential in Nigeria”.
According to him, the Federal Government will set up an independent tracking mechanism next year to ascertain the actual volume of gas that was flared in the country, as the commodity is being priced in the United States (U.S.)dollar.
Kachikwu said: “There is an urgency of yesterday to drive the policy that would enable us get out of gas flaring. I hear you talking about 10 per cent non-compliance, meaning that we have achieved a 90 per cent factor. My feeling is that these numbers are very mistaken.
“Beginning next year, we will be putting up an independent tracking mechanism, not relying on figures from the IOCs (International Oil Companies)and from DPR (Department of Petroleum Resources), to find out really what is the flare volume. My feeling is that there are a lot of management of those figures to suit the cap of the penalties that are being charged.
“My take is that we lose over half a billion to a billion of government revenue looking at the basis of the present penalties position. Nobody is effectively monitoring the volume, so when you actually go for the real effect of what is flared, in terms of statistics, it is much higher than that figures. However, we must appreciate the efforts that have been done in the past, efforts to increase penalties among others.”
The minister also noted that the marginal rise in the price of crude oil in the past few days was not an indication of an imminent boom in the cost of the commodity in the nearest future.
He explained that the decisions by the Organisation of Pteroleum Exporting Countries (OPEC) and non- members of the cartel to cut down production may have warranted the marginal rise in crude prices, but stressed that further increase in prices could not be guaranteed as this may not last.
Kachikwu said: “Now, as good as all these may be, the reality is that in the world, the era of high priced oil is gone. In fact, it is going to take a lot of work to sustain the $60 per barrel price and it is going to take a lot of discipline and concerted effort as well.”
He emphasised the need for the country to commercialise its gas resources, stating that crude oil alone cannot sustain the economy.
According to him, ensuring gas commercialisation, utilisation and transportation would go a long way in buoying the economy and wondered why Nigeria was still facing electricity problems despite producing a lot of gas.
Earlier in his address, the Minister of Power, Works and Housing, Babatunde Fashola, said Nigeria’s perennial power problems were man-made and not as a result of technical challenges.
He stated that in the last couple of days, gas flaring and most especially, sabotage had deprived most of the country’s critical gas power plants of gas, thereby, leading to a significant decline in power supply all over Nigeria.