Nigeria loses ₦373 billion to gas flaring in first half of 2023

The volume of gas flared by oil and gas companies operating in Nigeria has increased to 138.7 million metric standard cubic feet of gas (SCF) in the first half of 2023.

The data culled from the Nigerian Oil Spill Monitor, an arm of the Nigerian Oil Spill Detection and Response Agency (NOSDRA), shows the flare volume recorded in H1 2023 indicated a 9.1% increase when compared with the volume of gas flared in the same period in H1 2022 which is 126.1 million SCF.

The volume of gas flared during the period resulted in an emission volume of 7.4 million tonnes of carbon dioxide (CO2) which translate to about US$485.3 million.

When this amount is converted to naira using the I&E window rate, it translates to about ₦373 billion which is the amount the country has lost during the period.

In 2022, an emission volume of 6.7m tonnes of CO2 was recorded at a cost of US$441.2 million which translates to an equivalent of ₦338 billion lost when converted to naira.

Separate reports by NOSDRA and the World Bank put the total amount Nigeria lost to gas flaring in 2022 between US$761.2 million and US$893.1 million.

Between January and April 2023, oil and gas companies operating in Nigeria flared 92.3 million SCF worth an estimated ₦150.8 billion.

This volume of flared gas has continually increased despite the penalties the Federal Government has placed on defaulting companies.

As of April, the companies were expected to pay penalties of $184.6 million (an equivalent of ₦85.7 billion) for penalties incurred within the four-month period.

Meanwhile, the Federal Government had announced that it had collected a total amount of $85.1 million, representing ₦44.4 billion, being the total gas flare penalty collected from oil and gas companies from January 2023 till June, at the average exchange rate of ₦521.2/$ in 2023.

While Nigeria has on several occasions, set a target to end gas flaring, the goal remains distant as the country has maintained its top seven position in the list of countries that flare gas globally.