The Guardian reports that Nigeria may have
lost an estimated N2.56 trillion ($8 billion) to the lingering price dispute
between the International Oil Companies (IOCs) and Crude Oil Marketing Division
(COMD) of the Nigerian National Petroleum Corporation (NNPC).
The sum which is more than a third of the
2016 budget of N6.1trillion, represents the estimated cumulative revenue losses
from the under-assessment of the fiscal valuation on crude oil between 2006 and
2013, using the current exchange rate of N321 to $1, judging by the Nigerian
Transparency International (NEITI) 2013 audit of the petroleum industry.
Based on the Official Selling Price (OSP),
NEITI estimated that at least $1billion is lost yearly to crude price
under-assessment. The Joint Ventures (JVs) recorded the highest
under-assessment of over $410.9 million followed by the Production Sharing
Contracts (PSCs) with over $13.8 million and Marginal Fields/Sole Risk.
Since the parties are yet to resolve the
dispute, it means that Nigeria, currently suffering from economic depression
and in dire need of every petro-dollar it can get has lost even much more than
that till date.
The under-assessment recorded was mainly as a
result of price differentials between the official government position and the
oil companies’ estimates. The IOCs in defence, faulted the pricing methodology
by the NNPC/COMD, saying that the method contravened the provisions of the Petroleum
Profits Tax Act (PPTA) 1959.
According to NEITI, the under-assessments
were computed based on the advised pricing methodology by the NNPC in contrast
to the pricing methodologies used by the oil companies.
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