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Need for review of fine on gas flaring reechoes as FG loses N96bn in 5 months

Africa Environmental & Economic Peace Mission (AEEPM), weekend said it may approach a Federal High Court to seek for immediate review of the nation’s penalty regime on gas flaring. This is in response to the recent revelation of an estimated loss of N95.8bn from a total of 108.91 billion standard cubic feet of natural gas in the first five months of 2017 by the Nigerian National Petroleum Corporation (NNPC).

According to AEEPM, the current gas policy which pegged gas flare penalty at N10 per 1,000 scf of associated gas flared is too low, and cannot serve as a disincentive.

“Consequently, the low penalty has made gas flaring a much cheaper option for operators compared to the alternatives of marketing or re-injection. The intention of government is to increase the gas flaring penalty to an appropriate level sufficient to de-incentivise the practice of gas flaring.

Earlier last few months, an oil and gas expert, Dr. Kinsley Ujunwa had called on the federal government to raise the current gas flare penalty from N10 per 1,000 scf to N50 to tame the tide of free flow of flares in Niger Delta.

He said “It has become clear that the oil producing companies are taking Nigeria for a ride over the years in flaring gases at will because the penalty is so cheap when compared to what it is in even Angola”.

“N10 per 1,000 scf is a chicken change for all the oil companies. I believe that if it is raised to a little bit above N35 to 1,000 scf, nobody will tell them to do the needful which is very simple; deploy the best gas controlling and extraction technology which is everywhere.

Continuing, Dr. Ujunwa argued that “the main problem frustrating the needed legislation or regulation that will raise the penalty is the gluttony tendencies of policy makers who would easily fall prey to bribery by the oil companies”.

Latest data obtained from the NNPC showed that oil and gas companies operating in the country flared a total of 108.91 billion standard cubic feet of natural gas in the first five months of the year, causing the country an estimated loss of N95.8bn going by N10 per 1.000 scf.

The figures in a breakdown showed further that 24.77 billion scf of gas was flared in January; 20.42 billion scf in February; 21.47 billion scf in March; 20.50 billion scf in April, and 21.75 billion scf in May.

Besides, the amount of gas flared in the first five months of this year increased by 11.6 billion scf, compared to the volume flared in the corresponding period last year.