Oil and gas companies pay ₦346bn as penalties in 5 years

Gas flaring occurs when natural gas is burnt off resulting in the release of a range of pollutants into the atmosphere including carbon dioxide, methane and black carbon. The Central Bank of Nigeria (CBN) disclosed the payments as federally collected revenue.

Between 2018 and 2021, about 115.3 million tonnes of carbon dioxide have been flared by major oil companies operating in Nigeria and this has automatically been a source of concern to residents of the oil-producing areas and neighbouring communities.

From the ₦4.5 billion paid in 2018, penalties paid for gas flaring have been increasing steadily over the years by over 1,491% to ₦71.6 billion paid in 2022.

From the data, it was observed that in 2018, the defaulting companies paid a total of ₦4.5 billion as penalties. The sum of ₦86.2 billion was paid in 2019, ₦87.1 billion in 2020, ₦96.5 billion in 2021, and ₦71.6 billion in 2022.

While the FG and the international community have continued developing policies to end gas flaring across the global petroleum industry, oil and gas analysts have argued that the Federal government's soft stand on the issue like the low fines, has emboldened most of the oil and gas firms to maintain their position on gas flaring.

Nigeria’s gas reserve which stands at around 208 trillion standard cubic feet is the largest gas reserve in Africa.

According to the World Bank’s 2023 Global Gas Flaring Tracker Report, Russia, Iraq, Iran, Algeria, Venezuela, the United States, Mexico, Libya, and Nigeria which are the top nine gas flaring countries continue to be responsible for the vast majority of flaring.

These countries are responsible for flaring nearly three-quarters of the volume of gas globally.