Oil and gas companies paid a total of N346bn as penalty for flaring gas in five years, according to data from the Central Bank of Nigeria.
The amount was marked as part of the federally collected revenue.
Gas flaring is the surface combustion or burning of natural gas, often associated with crude oil production when pumped up from the ground. It is burnt off or a, as part of the oil production process.
According to the World Bank, the practice has persisted since the beginning of oil production over 160 years ago and takes place due to various issues, from the market and economic constraints to a lack of appropriate regulation and political will.
However, the Federal Government had in recent times led campaigns for gas monetisation against flaring.
Findings showed that an undisclosed number of companies paid the sum between 2018 and 2022 as companies continue to flare gas.
It was observed that the fines maintained a steady increase of over 1,491 per cent from N4.5bn paid in 2018 to N71.6bn collected in 2022.
A breakdown showed that the companies paid N4.5bn in 2018, N86.2bn in 2019, N87.1bn in 2020, N96.5bn in 2021, and N71.6bn in 2022
However, oil and gas analysts linked the rise in gas flaring to low fine by the Federal Government, lack of infrastructure investment, among others.
According to a 2022 report by the National Oil Spill Detection and Response Agency, 12 Million tonnes of CO2 emitted into the atmosphere from gas flaring has contributed to global warming.
To tackle this, the Chairman, Society of Petroleum Engineers, Nigeria Council, Prof. Olalekan Olafuyi, in a recent interview, said the Federal Government would increase gas flare penalties as Nigeria races towards achieving its commitment to the United Nations net zero goals by 2060.
Although he did not state how much increase the flare rates would attract, he said the council was working closely with the Nigerian Upstream Petroleum Regulatory Commission on the matter.