Three years after the landmark Petroleum Industry Act (PIA) became operational, Nigeria's oil and gas sector remains trapped in a cycle of distrust, opacity, and unfulfilled promises. Stakeholders who anticipated a new era of transparency and competitiveness are deeply disappointed, as the government appears to selectively implement the law for immediate revenue gains while neglecting its core reform mandates.
NEITI's Rescue Mission and Persistent Theft
For decades, Nigeria, once the world's sixth-largest oil producer, lacked accurate data on its production volumes and revenues. This systemic opacity allowed massive losses to go unchecked until the establishment of the Nigerian Extractive Industries Transparency Initiative (NEITI) in 2003/2004. Empowered by an Act of Parliament in 2007, NEITI has been a crucial watchdog.
As of March 2025, NEITI audits have facilitated the recovery of $4.85 billion from outstanding liabilities totaling $8.26 billion. This figure stems from a comprehensive audit conducted in 2021, indicating that billions more remain unaccounted for.
However, these recovery efforts are undermined by staggering ongoing theft. A report by Fair Finance Nigeria in October 2025 revealed that a colossal 619 million barrels of crude oil, valued at $46 billion, were stolen between 2009 and 2020. The report cited weak regulation, systemic corruption, and complicity by security agencies as key enablers. Furthermore, illegal mining activities, often involving collaborations between state authorities and foreign nationals, are estimated to cost Nigeria $9 billion annually and fuel terrorism.
Downstream Dysfunction: Refineries and Regulatory Clash
The downstream sector exemplifies the sector's paralysis. The nation's four public refineries in Port Harcourt, Warri, and Kaduna remain moribund. Approximately $25 billion has been wasted in futile attempts to revamp these facilities since President Olusegun Obasanjo's attempt to privatize them was reversed in 2007.
The commissioning of the privately-owned Dangote Refinery on May 22, 2023, was heralded as a game-changer, promising to end Nigeria's dependence on fuel imports, which cost up to $25 billion yearly. Yet, data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) tells a conflicting story.
An NMDPRA Fact Sheet from October 2025 showed that Dangote Refinery supplied an average of only 12 million litres of petrol daily between September 2024 and October 2025, far short of its 35 million litres commitment. This shortfall persists even as national consumption rose from 47.5 million to 56.7 million litres per day over the same period, driving prices higher.
The tension between the regulator and the refinery boiled over publicly. Aliko Dangote, at a recent press conference, launched a scathing attack on the then-CEO of NMDPRA, Farouk Ahmed. Dangote accused Ahmed of spending taxpayers' money to fund his children's secondary education in Switzerland at a cost of about $5 million for four children, an amount he deemed unethical given widespread poverty in Nigeria. This confrontation culminated in Ahmed's resignation last week.
Entrenched Interests and a Call for Systemic Reform
The public feud highlights a sector where personal interests often override institutional mandates. Dangote expressed frustration that entrenched interests continue to block progress in a supposedly deregulated sector, allowing high volumes of imported refined products that undermine local investment.
October 2025 records showed Nigerians spent a staggering N21.8 trillion on petrol in 12 months, with imports forming a significant portion. Stakeholders now demand greater transparency in how NMDPRA computes its data to rebuild trust.
The situation calls for more than changing personnel. The fundamental template that fuels distrust across the oil and gas value chain requires urgent reform. Critics point to the National Assembly, which has conducted numerous ineffective probes into the sector. Instead of rigorous oversight to make the PIA work, lawmakers are often accused of lobbying agencies like NMDPRA, NNPCL, and FIRS for contracts and jobs.
The onus is now on the political authorities, including the Minister of Petroleum, President Bola Tinubu, to purge the sector of insatiable greed, declare any interests, and act decisively to enforce the PIA as intended. Only then can the industry work for the national interest, moving beyond decades of deliberate opacity and corruption.
