Mrs. Obiageli Onuorah, Assistant Director Communications & Advocacy of NEITI
…NEITI to pilot roles of the media in effective implementation of PIA.
The Executive Secretary, Nigeria Extractive Industries Transparency Initiative (NEITI) has stated that Nigeria must be prepared to mainstream transparency and accountability mechanisms into her energy transition agenda to avoid the pitfalls of her past and present energy circumstances.
Dr. Orji who was represented by the Assistant Director Communications & Advocacy Mrs. Obiageli Onuorah stated this while delivering a special industry address at the Association of Energy Correspondents of Nigeria (NAEC) Strategic International Conference in Lagos with the topic “Transparency and Accountability a Key to Sustainable Energy Sector: The Role of Nigeria Extractive Industries Transparency Initiative (NEITI)”.
He commended NAEC for choosing the broad theme of: “Energy Transition, Shaping the Future of Nigeria’s Energy Industry: An Appraisal of the Petroleum Industry Act, Evolving Benefits and Challenges” for this year’s Conference. Which he said is very apt, given the unfolding developments and emerging realities both in the global and domestic energy industry.
According to him ‘’As the world moves from fossil fuel to cleaner and sustainable energy, it must be noted that transparency and accountability will be central to efforts to support the transition process. This will include the reporting of emissions, the disclosure of climate risks and the overall governance of the future energy industry. Therefore, Nigeria must be prepared to mainstream transparency and accountability mechanisms into her energy transition agenda to avoid the pitfalls of her past and present energy circumstances.’’
He affirmed that NEITI has a major role to play in a sustainable energy sector for the country and is already working with its partners to help stakeholders gain full insights and deepen public knowledge on the risks and opportunities that are associated with the transition within our national context through timely disclosures and dissemination of extractive industries data and information. The agency, considering the multi-sectoral nature of the energy transition, is galvanising the needed inter-agency cooperation and national consensus for a sustainable energy sector.
He noted that already NEITI through the EITI has engaged a consultant to advise it specifically on energy transition. Together with the Natural Resources Governance Institute, our global affiliate -the EITI and BudgIt, we are planning a National Dialogue on Energy Transition on the 6th of October. This Dialogue will bring together national and international experts to brainstorm on Nigeria’s contextual reality as it concerns its transition to a low carbon, cleaner and renewable energy future.
‘’As you are aware, the decision by our government to sign on to the global Extractive Industries Transparency Initiative (EITI) and establish the Nigeria Extractive Industries Transparency Initiative (NEITI) was informed primarily to address the challenges of the resource curse in our country’s energy sector. Over the years, NEITI has been doing this through regular conduct of industry audits, disclosures and wider dissemination of vital credible and verifiable information and data from the sector to the public.’’
‘’The belief is that unimpeded access to timely information and data about the country’s oil, gas and mining sectors by the citizens, media and other accountability actors will promote public debate on the management of the sector, foster civic actions, accountability and ultimately sustainability in the sector. ‘’ he noted.
‘’Today, I can say with every sense of modesty that the impacts of NEITI leading sweeping reforms in the industry are visible for everyone to see. NEITI has led a reform revolution in the opening of the sector for citizens’ scrutiny by providing reliable information and data in the public domain which has helped the media and civil society to push the boundaries of constructive engagements, promoted public disclosure, dialogue and debates in the management of the sector.
On legislation, NEITI reports recommended the Petroleum Industry Bill now an Act of Parliament. We are also currently serving on the Presidential Steering Committee to ensure the effective implementation of the new law. The landmark impact of the PIA is the ongoing transition of the NNPC to a commercial enterprise as recommended by all previous reports of NEITI. The NNPC has also joined the global EITI as a supporting company. ‘’ Orji stated
He said that NEITI is also supporting the government’s drive to increase revenues through thorough reconciliations of data of operators in the nation’s extractive sector, push for renewal of obsolete MoUs and fiscal regime of the sector and other policy advisory roles to government.
It would be recalled that during the recent release of the NEITI industry reports of the oil and gas sector, we reported that 77 companies in the oil and gas sector in Nigeria owe the federation a total of US$6.477 billion (N2.6 trillion). That report could have gathered dust on the shelves unnoticed. But you – the media picked up the news and ran with it. The result is that the House of Representatives set up an Ad hoc Committee to investigate, recover the outstanding debts and conduct a proper reconciliation of accounts between the Federal Government and the Oil Companies. I am glad to report that over $3.8Billion (N1.5 Trillion) has been paid while over US$2.67 Billion (N1.07 Trillion) is still outstanding. This is just one of the impacts of our partnerships with you. I can name many more.
The NEITI reports have also led to the activation of the solid minerals revenue account. From this account, revenues are shared to the federation using laid down constitutional provisions including the payment of 13% derivation to solid minerals producing states as it is done for the oil and gas sector.
‘’Let me use this opportunity to place on record that the modest achievements and successes so far recorded by NEITI would not have been possible without the unflinching support of members of NAEC. The work you do daily, covering and reporting the oil and gas sector is very important to our operations and mandate. NEITI and NAEC are natural allies with common interests in the areas of transparency, information disclosure, dissemination and accountability in the energy sector.
He called on all energy correspondents to familiarise themselves with the contents of the PIA, work more closely with NEITI to use the legislation as an important tool to rescue Nigeria from the resource curse through effective implementation of the new law. NEITI will conduct relevant training for energy correspondents on the EITI process, the NEITI mandate and the roles of the media in the effective implementation of the PIA.
Support for Fossil Fuels almost Doubled in 2021
Major economies sharply increased support for the production and consumption of coal, oil and natural gas, with many countries struggling to balance longstanding pledges to phase out inefficient fossil fuel subsidies with efforts to protect households from surging energy prices, according to analysis released today by the Organisation for Economic Co-operation and Development and the International Energy Agency.
New OECD and IEA data show that overall government support for fossil fuels in 51 countries worldwide almost doubled to 697.2 USD billion in 2021, from 362.4 USD billion in 2020, as energy prices rose with the rebound of the global economy. In addition, consumption subsidies are anticipated to rise even further in 2022 due to higher fuel prices and energy use.
“Russia’s war of aggression against Ukraine has caused sharp increases in energy prices and undermined energy security. Significant increases in fossil fuel subsidies encourage wasteful consumption though, while not necessarily reaching low-income households,” OECD Secretary-General Mathias Cormann said. “We need to adopt measures which protect consumers from the extreme impacts of shifting market and geopolitical forces in a way that helps keep us on track to carbon neutrality as well as energy security and affordability.”
“Fossil fuel subsidies are a roadblock to a more sustainable future, but the difficulty that governments face in removing them is underscored at times of high and volatile fuel prices. A surge in investment in clean energy technologies and infrastructure is the only lasting solution to today’s global energy crisis and the best way to reduce the exposure of consumers to high fuel costs.” IEA Executive Director Fatih Birol said.
The OECD and IEA produce complementary databases that provide estimates of different forms of government support for fossil fuels. The current OECD-IEA combined estimates cover 51 major economies, spanning the OECD, G20 and 33 other major energy producing and consuming economies representing around 85% of the world’s total energy supply.
OECD analysis of budgetary transfers and tax breaks linked to the production and use of coal, oil, gas and other petroleum products in G20 economies showed total fossil fuel support rose to USD 190 billion in 2021 from USD 147 billion in 2020. Support for producers reached levels not previously seen in OECD tracking efforts, at USD 64 billion in 2021 – up by almost 50% year-on-year, and 17% above 2019 levels. Those subsidies have partly offset producer losses from domestic price controls as global energy prices surged in late 2021. The estimate of consumer support reached USD 115 billion, up from USD 93 billion in 2020.
The IEA produces estimates of fossil fuel subsidies by comparing prices on international markets and prices paid by domestic consumers that are kept artificially low using measures like direct price regulation, pricing formulas, border controls or taxes, and domestic purchase or supply mandates. Covering 42 economies, the IEA finds that consumer support increased to USD 531 billion in 2021, more than triple their 2020 level, driven by the surge in energy prices.
The OECD and IEA have consistently called for the phasing out of inefficient fossil fuel support and re-direction of public funding toward the development of low-carbon alternatives alongside improvements in energy security and energy efficiency. Subsidies intended to support low-income households often tend to favour wealthier households that use more fuel and energy and should therefore be replaced with more targeted forms of support.
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