The House of Representatives Committee on Finance has voiced apprehensions regarding the escalating cost of crude oil production, coupled with low output and reduced revenue to the federal government over the past decade. Chairman of the committee, James Faleke (APC, Lagos), raised these concerns during an opening remark at a meeting held on Tuesday with the Nigerian National Petroleum Corporation Limited (NNPCL) to discuss the impact of crude oil production on government revenue.
Faleke underscored the significance of understanding the implications of production costs on the available revenue accruable to the federal government for executing its programs outlined in the national budget. He emphasized that higher production costs result in fewer funds available to the government and Nigerians alike.
“The higher the cost of extracting a barrel of crude oil from the ground, the less funds available to the government and Nigerians,” Faleke stated.
The committee’s concern reflects growing apprehensions over the sustainability of Nigeria’s oil sector amidst challenges such as declining output, rising production costs, and fluctuating global oil prices. These factors have contributed to reduced revenue generation for the government, posing significant implications for national development and budget execution.
As Nigeria grapples with the need to diversify its economy and reduce dependence on oil revenue, addressing the underlying issues plaguing the oil sector, including production costs, becomes imperative. The House of Representatives Committee’s engagement with the NNPCL highlights the government’s commitment to addressing these challenges and seeking viable solutions to enhance revenue generation and promote economic sustainability.
