ABUJA, Nigeria — Oil and gas companies operating in Nigeria paid an estimated $646 million in gas flaring penalties in 2025, the highest level in five years, as flaring volumes surged despite longstanding regulatory efforts to curb the practice.
Okay News reports that the penalties accounted for 58.7 percent of the total value of gas flared, which stood at $1.1 billion during the year, according to data from the Nigerian Oil Spill Monitor and corroborated by the National Oil Spill Detection and Response Agency (NOSDRA) .
Oil producers flared approximately 323.2 million standard cubic feet of gas in 2025, highlighting persistent inefficiencies in upstream operations and limited progress in commercialising associated gas. Flaring volumes have fluctuated over the past five years, declining from 349.3 million scf in 2020 to 230.1 million scf in 2022, before rising to 278.3 million scf in 2023 and 301.3 million scf in 2024.
Industry analysts said the current penalty regime has not been strong enough to drive behavioural change among operators.
“Fines for flaring should be increased to make reinjection more attractive,” said Jide Pratt, country manager at TradeGrid, noting that weak penalties and the high cost of gas infrastructure continue to incentivise flaring.
Under current rules, producers pumping 10,000 barrels per day or more are charged $2.00 per 1,000 scf flared, while smaller operators pay $0.50. Nigeria has enacted multiple regulations to curb gas flaring since 1969, including a 1984 provision that makes the practice illegal without written approval from the Minister of Petroleum Resources.
Concerns are also mounting over the pace of progress under the government’s “Decade of Gas” initiative.
“Are we truly prepared for significant gas uptake and utilisation, especially with about 40 percent of the timeline already elapsed and limited progress in flare reduction?” said Oyinkepreye Orodu, a sub-surface and energy researcher.
Recent disclosures by the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) show that N289.306 billion in gas flare penalties were remitted to the Federal Government between January and November 2025, representing approximately 3.07 percent of the N9.411 trillion total revenue collected from oil and gas operators over the same period.
The NUPRC’s Annual Financial and Operational Performance Report indicates that N602.2 billion was generated from gas flare penalties between 2022 and 2024, with collections rising from N70.4 billion in 2022 to N140.5 billion in 2023, before surging to N391.3 billion in 2024.
