The Federal Government failed to receive any revenue from the Nigeria Liquefied Natural Gas (NLNG) company during the first nine months of 2024, highlighting the growing fiscal strain on the country as oil production disruptions and pipeline sabotage continue to undermine earnings.
According to data released by the Budget Office of the Federation, the government had projected N357.9 billion in dividend payments from NLNG in its 2024 fiscal plan. However, actual inflows in the first, second, and third quarters amounted to zero.
This revenue gap emerges at a time when the Tinubu administration is working to bridge a significant fiscal deficit while also pushing reforms to grow income from non-oil sources.
As of the end of September, federally retained revenues stood at just over N14.5 trillion—around 29 percent short of the N25.9 trillion annual target.
A major factor behind the NLNG shortfall is believed to be persistent pipeline vandalism and crude theft, which have disrupted gas supply and driven up operational costs, ultimately impacting profitability and dividend payouts.
The federal government, through the Nigerian National Petroleum Company Limited (NNPCL), owns a 49 percent stake in NLNG. “Pipeline vandalism affects operating costs and profit, which in turn determines whether dividends are paid,” explained Wunmi Iledare, emeritus professor of Petroleum Economics and a former president of the Nigerian Association for Energy Economics.
Industry insiders report that NLNG has been unable to run its six-train Bonny Island facility at optimal levels due to inadequate gas supply—a consequence of frequent interruptions on key pipelines across the Niger Delta.
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Although Nigeria is recognized as a global exporter of liquefied natural gas, its production utilization remains low compared to top producers like Qatar and Australia.
In addition to operational challenges, the lack of dividend remittances from NLNG has sparked questions around revenue treatment under the Petroleum Industry Act (PIA) of 2021.
Iledare pointed out that under the PIA, it is the NNPCL—not the federal government directly—that now holds the federation’s interest in NLNG.
This change in ownership structure means that revenue flows may no longer automatically reflect in the federal account unless formally remitted by the NNPCL.
As Nigeria’s fiscal authorities struggle to meet revenue targets, the absence of expected NLNG dividends adds another layer of complexity to managing the national budget, especially amid ongoing efforts to reduce reliance on crude oil exports.
