Nigeria Raises Fines for Flaring

Nigeria has increased the fine for gas flaring activities for the first time in four decades in a bid to discourage companies from wasting gas, although it is seen more as a revenue-raising scheme for the government. The rise took effect alongside the Flare Gas Regulations 2018, which has the approval of the president, Muhammadu Buhari.

The law under the National Gas Flare Commercialization Program (NGFCP) now states that companies are liable for a fine of naira 720 (about $2)/'000 ft³ flared. Since 1979, the fine had been just naira 10/'000 ft³.

In a media event in Lagos, on August 22, 2018, Olowoleola Ogunsola, representing the Gas Monitoring and Regulation unit of the Department of Petroleum Resources (DPR), said the increase in fine was a way to get companies to instead collaborate with the NGFCP to maximise unused gas.

According to the DPR representative, the amount of gas flared last year – 888mn ft³/day from over 130 sites around the country – could have fed two or three liquefied natural gas (LNG) trains.

“It is in view of these losses and environmental damage associated with flared gas that the federal government came up with the NGFCP to harness the flared gas and put it into productive use," he said.

Under the NGFCP, the government will seek qualified investors with the financial, technical and technological expertise to harness the flared gas, Ogunsola said.

The NGFCP has announced that by September 2018, bids to curb gas flaring activities in the country, to meet up with the 2020 target will begin.

But lawyer Peter Jiya told NGW that the fine would have no effect on the practices of operating companies, as it is just too small. Jiya, who was also once a member of parliament, said the fine could be a way of making more revenue for the government.