Advances in Management and Applied Economics

Oil spillage cost, gas flaring cost and life expectancy rate of the Niger Delta people of Nigeria

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• Abstract

  The study examined the degree of influence of oil spillage and gas flaring costs on life expectancy rate of the Niger Delta people of Nigeria. It was intended to survey the life threatening impacts of lost revenue occasioned by oil spillage and gas flaring activities of the Oil and Gas companies operating in the Niger Delta region of Nigeria between 1979 and 2008. The descriptive survey research method was used to select forty oil and gas producing local government areas from the nine states of the Niger Delta region. Data on oil spillage rate, gas flaring rate, oil spillage volume, gas flaring volume, oil spillage cost and gas flaring cost were obtained from NNPC, the oil and gas companies and the Central Bank of Nigeria for the thirty years studied. Data for life expectancy were obtained from the United Nations Common Database for the thirty years. The study revealed a total oil spillage and gas flaring revenue lost of US $175,795,811 or N20,671,321,766.00 with a mean life expectancy rate of 49.12 years between 1979 and 2008 with an insignificant correlation between life expectancy rate and the costs of oil spillage and gas flaring ranging between 1.8% and 5.2% but a significant impact of oil spillage and gas flaring activities on socio- economic conditions and poverty rate of the people of the Niger Delta region of Nigeria for the years studied. Based on these results, the study recommended that government should enact mandatory legislations for oil and gas prospecting companies to establish Oil and Gas Compensation Fund to control the frequency of oil spillage and gas flaring in the Niger Delta region of Nigeria. Nigerian Government need to initiate people oriented policies in governance to ensure micro economic empowerment and human capital development of the people of the Niger Delta region aimed at reducing the rate of poverty. There should be a conscious implementation of the Niger Delta Master Plan to fast track infrastructural development in the region and to enhance life expectancy rate of the people of Niger Delta.