FG incurs loss of $1b yearly due to gas flaring - Kachikwu

• Dr. Ibe Kachikwu says the federal government is planning to set up an independent tracking mechanism to ascertain the actual volume of gas that is flared in the country

• Kachikwu says the recent rise in oil price is not an indication of oil boom in the cost of the commodity

• The minister discloses that crude oil alone cannot sustain the economy and urges the need for the country to commercialize its gas resources.

The federal government loses between $500million and $1billion yearly to gas flare data falsification in the country, the minister of state for petroleum resources, Dr. Ibe Kachikwu has disclosed.

Kachikwu according to The Nation,
made the disclosure on Tuesday, December 13, when he spoke at the gas competence seminar in Abuja.

At the seminar which was themed: Towards ending gas flaring and unlocking gas potential in Nigeria, the minister said the federal government was planning to set up an independent tracking mechanism next year to ascertain the actual volume of gas that was flared in the country.

Kachikwu said: “There is an urgency of yesterday to drive the policy that would enable us get out of gas flaring. I hear you talking about 10 per cent non-compliance, meaning that we have achieved a 90 per cent factor. My feeling is that these numbers are very mistaken.”

“Beginning next year, we will be putting up an independent tracking mechanism, not relying on figures from the IOCs (International Oil Companies)and from DPR (Department of Petroleum Resources), to find out really what is the flare volume. My feeling is that there are a lot of management of those figures to suit the cap of the penalties that are being charged.”

The minster who noted that the commodity is being priced in the United States (U.S.) dollar said Nigeria loses over half a billion to a billion of government revenue looking at the basis of the present penalties position. 

Speaking on the marginal rise in the price of crude oil in the past few days, Kachikwu explained that the recent rise in oil price was not an indication of oil boom in the cost of the commodity.

He adduced the rise in the price of crude oil to the decisions by the Organisation of Pteroleum Exporting Countries (OPEC) and non- members of the cartel to cut down production.

Kachikwu said: “Now, as good as all these may be, the reality is that in the world, the era of high priced oil is gone. In fact, it is going to take a lot of work to sustain the $60 per barrel price and it is going to take a lot of discipline and concerted effort as well.”

He said crude oil alone cannot sustain the economy and emphasised the need for the country to commercialise its gas resources.

In another development, the federal government is making plans to start transporting oil by rail due to the spate of pipeline bombings perpetuated by militants in the Niger Delta region.

NAN reports that Mr Goddy Nnadi who is the general manager of cooperate service of the Petroleum Equalisation Fund (PEF) revealed on Sunday, December 11 that due to the state of the pipelines, rail transport will soon be the main form of transport.