Nigeria loses N1trn yearly to crude oil production

By Ali Smart

The Chairman of the House of Representatives Committee on Appropriation has revealed that Nigeria loses an average of N1 trillion annually to crude oil production.

The lawmaker, spoke on Wednesday while fielding questions from reporters on the 2016 budget.

According to Jibrin, there is need to scrutinise the budget process very well, especially the aspect of cash calls related to the production of crude oil given the dwindling receipts from crude oil sales.

“One very important aspect that swallows a large chunk of the money in the budget is the cash call and production costs. Many people take their eyes away from production costs,” he said.

Read also: OPEC ups crude oil production by 810,000bpd

Justifying the need for careful perusal of the budget process, he said such exercise becomes inevitable because “Every year we pay an average of one trillion naira as cost of production. So, it is important that this time around, we to sit with relevant authorities in the oil and gas sector to see the details of this production cost, to ensure the country is not just being shortchanged.”

On the benchmark, he said: “The benchmark has been pegged at $38 dollars and of course we have known that the oil price has gone much below that figure. I am sure that during this budgeting period, we will engage again with the Committee on Finance and relevant committees and we should be able to peg the benchmark at a very safe figure that would be more realistic.

“Of course, the benchmark is one of our concerns and the revenue aspect of the budget. You have raised the issue of benchmark which we are going to work on to see that we peg it in what looks more practicable. Then of course, there is the aspect of the non oil revenue.

“For the non oil revenue, of course, the projection looks realistic but if you go by history, we must also be extremely disciplined to ensure that the projections are met month after month. So, we are not unmindful of that.”

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