Nigeria ranks next to only Mexico as the country with the highest scale of oil theft in the world such that in the first three months of this year, Nigeria lost $1 billion in revenue to the oil crooks.

This has triggered jitters in the Presidency with President Muhammadu Buhari expressing concern on Friday over large-scale crude oil theft, saying it was affecting the country’s revenues “enormously”.

This is even as oil subsidy is getting bigger and messier with N18 billion said to be the daily spend on subsidy. Data from NNPC said oil subsidy wiped out every dollar made in the first seven months of this year, leaving the Nigerian crude oil custodian with no dime to pay to the Federation account.

Oil theft occurs in various ways, the lowest being the breaking of oil heads (wells) and siphoning of crude oil for artisanal refining. However, the biggest theft occurs offshore with vessels illegally entering Nigerian waters and siphoning crude oil in huge volumes which is sold at the international market usually at slightly lower prices than the prevailing official prices.

This is perpetrated by international vessel owners and hirers in concert with top Nigerians including military personnel, bunkerers masquerading as businessmen and politicians.

Those conversant with crude oil business say that no vessel will enter Nigerian waters without clearance by the relevant Nigerian security authorities and even after loading crude, such a vessel cannot leave Nigerian waters without clearance by Nigerian authorities.

“What we lament as oil theft is not possible without support of top Nigerians including persons in the Presidency, military, police and elite business people. It’s not a poor man’s game. Oil theft, the type that cost the nation billions in dollars, is a game of the rich and powerful. If the President or anybody wants to stop oil theft, the person must look around him, around the relevant security agencies that guard our waters. These are the people who aid and abet oil theft, not the poor artisans in the creeks,” says an oil and gas expert who pleaded not to be named.

Nigeria is unable to meet some of its financial obligations to her citizens due to the oil theft, Buhari told government workers who are requesting a pay increase to help deal with double-digit inflation.

“On your request for a salary review, I wish to urge you to appreciate the revenue constraints being presently faced by government which is caused mainly by the activities of unscrupulous citizens through the theft of our crude oil, a major contributor to our revenue base,” Buhari said.

Crude theft poses an existential threat to Nigeria’s oil industry, the local head of Shell has said, resulting in the shutdown of two of its major pipelines.

Nigeria is currently battling to stabilise its ailing currency, to curb surging inflation and boost growth after the economic disruption caused by the COVID-19 pandemic.

Annual inflation in Nigeria hit a 17-year high in July, data showed on Monday.

Buhari also blamed the war in Ukraine for the rise in global food prices and high transportation costs for goods and services.

He instructed security agencies to speedily clamp down on those involved in oil theft in the Niger Delta, adding that Nigeria was also strengthening cooperation with its neighbours to stop criminals syphoning away stolen crude by sea.

“We will not allow a few criminals to have unfettered access to the nation’s oil supply,” Buhari said.

Additional report by REUTERS