A price dispute between the Federal Government of Nigeria and International Oil Companies (IOCs) operating in the country has resulted in a revenue loss of over $4.04 billion in eight years, the Guardian reports.

It was reported that the long-standing disagreement was due to the differences in price to be used in valuing crude oil for the aim of calculating IOCs’ tax obligation from petroleum profit.

According to Waziri Adio (photo), the Executive Secretary of Nigerian Extractive Industry Transparency Initiative (NEITI), the price differentials continued as government and the IOCs could not reach a mutual agreement on the pricing policy to be adopted.

He blamed the differences on the inability of successive governments to implement recommendations to improve the situation in the nation’s oil and gas industry.

“Nigeria had a MoU with the oil companies which expired. There is a procedure for renewing the MoU. While that is going on, there is also room for certain things. There are two pricing methodologies; there is what is called the realizable price which the oil companies prefer. There is the official selling price, which the government prefers,” he said.

He urged the government to strengthen its laws and institutions, especially in the oil and gas sector, so as to achieve maximum results in its revenue collection.

Anita Fatunji