The House of Representatives on Friday questioned the management of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) regarding oil production, revenue from crude oil sales, and other activities in the upstream petroleum sector.
The Lead Chairman of the Joint Committees on Finance and National Planning, Hon. Abiodun Faleke, issued the directive in Abuja during an ongoing interactive session with NUPRC and other key revenue-generating agencies on the 2025-2027 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
In his presentation, NUPRC Chief Executive Officer, Engineer Gbenga Komolafe, explained that the Commission generates various revenues from oil royalties, gas royalties, concession rentals, gas flare penalties, miscellaneous oil revenues (including fines and levies), signature bonuses, and license renewals.
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While providing updates on revenue generation, Engineer Komolafe, represented by the Executive Commissioner for Economic Regulation & Strategic Planning (ECR&SP), Mr. Babajide Fasina, disclosed that NUPRC retains 4% of the cost of revenue collection (CORC) from the total revenue collected on behalf of the Federal Government. This amount is credited directly to the Federation Account, while FAAC credits the 4% to the Commission.
He stated:
“The cost of revenue collection amounted to ₦114.84 billion in 2023, compared to ₦114.38 billion in 2022.
“The amount released in 2023 includes ₦2.82 billion for capital expenditure, though ₦173.77 billion was due as 4% of the actual collections of ₦14.34 trillion in 2023.
“The Commission also generates internal revenues, such as registration fees, license fees, fines, recoveries, etc. It generated ₦1.44 billion in 2023, compared to ₦30.08 billion in 2022, accounting for 1.26% of total revenue realized in 2023 and 2.62% in 2022, respectively.”
Fasina further informed the Committee that the Commission recorded higher expenditures in 2023 compared to 2022, with an increase of ₦11.46 billion (10.83%).
He added:
“Personnel costs, which constitute the largest share, amounted to ₦82.35 billion, representing 70.19% of the total expenses of ₦117.33 billion, followed by overhead costs of ₦31.63 billion.”
However, the NUPRC Executive Commissioner noted a decline in the Commission’s non-tax remittance from ₦3.67 billion in 2022 to ₦1.77 billion in 2023, alongside amortization and depreciation expenses of ₦246.66 million and ₦1.33 billion, respectively.
The Chairman of the Committee on Finance, Hon. James Faleke, and other members expressed dissatisfaction with the Commission’s bloated personnel and overhead expenditures.
Hon. Faleke remarked:
“I’m wondering what type of organization you have. You are paying ₦88 billion as salaries. How many staff do you have?
“The National Assembly, before the review, was allocated ₦150 billion annually for all operations, including the Senate, House of Representatives, and management.
“If your agency alone is spending ₦88 billion, that’s excessive. This is why you have so much money due to the 4% collection rate. We need to review this rate because it’s too high. You’re spending ₦88 billion on personnel and ₦40-something billion on overheads.”
Despite attempts to justify the figures, the Committee rejected NUPRC’s explanations and demanded comprehensive records of revenues, expenditures, and exploration activities at various Frontier Basins in the country.
In his ruling, Hon. Faleke directed:
“You must return with records of all oil-producing wells, detailing the daily production volume in liters, shipment schedules, rates, and proceeds. Provide reports on activities, expenses, and outputs from Frontier Explorations. Be here on the 18th at 11 a.m. with these records.”
Similarly, the Committee instructed the Nigeria Bulk Electricity Trading (NBET) PLC to provide more specific details on its budget performance and activities in the electricity market.
NBET had informed the Committee about discrepancies between invoices issued to Generation Companies (GenCos) and Distribution Companies (DisCos). According to the agency, “NBET invoices DisCos before receiving and verifying GenCo invoices as required by the settlement calendar. This timing difference, along with interest and True-Up components, causes disparities.”
The Committee requested more detailed documentation and directed NBET officials to revise their submissions.
Additionally, the Committee instructed its Clerk to write to the Pension Transitional Arrangement Directorate (PTAD), specifying the required details for review.
