PIB: FG Slashes Royalty, Corporate Income Tax On Gas
Oil minister promises attractive fiscal framework for gas in new bill
A new version of the executive bill, which is slated to be submitted before National Assembly in the next few weeks, New Telegraph gathered, guarantees attractive fiscal framework for gas. Minister of State for Petroleum Resources, Chief Timipre Sylva, confirmed this during a webinar hosted by the Nigerian Association of Petroleum Explorationists (NAPE) monitored by New Telegraph.
The minister, who noted that the “proposed bill was expected to be submitted before the legislators within a few weeks,” added that producers and consumers of natural gas alike would now have legal framework to agree on gas prices on a willing seller, willing buyer basis.
“It establishes an attractive fiscal framework for gas that allows low royalty and corporate income tax and a variety of small taxes and levies,” the minister said. Producers and consumers of natural gas alike, he continued, could agree on gas prices on a willing seller willing buyer basis.
“However, special protections are built in to ensure supply to wholesale customers in strategic sectors which are the power sector, gas-based industries and commercial sectors with significant offtake possibilities”, he declared.
PIB has been on and off the National Assembly for about two decades.
The new bill, Sylva explained, “will establish a gas base price that is higher than current levels for producers and this base price will increase over time. “This price level should be sufficiently attractive to increase gas production significantly since this gas price will be comparable with gas prices in other emerging economies with considerable gas production.”
“The price will be independent of all gas prices for LNG export and is therefore a stable basis for enhanced domestic gas development, regardless of international oil or energy development.”
Sylva said the proposed bill woukd also establish a flexible and comprehensive framework for midstream gas development. “Gas pipelines and gas processing plants can be built on own account of the investor. In addition, a midstream gas infrastructure fund Is being proposed in the PIB with the narrow focus of unleashing private investment to process gas and transport by pipelines,” he added.
The bill is expected to help cut down a lot of wastes in investment and further increase the government’s revenue. Another law by the government, Nigerian Oil and Gas Industry Content Development (NOGIC) Act, for instance, has saved Nigeria the sum of $2 billion in engineering procurement and construction contract for LNG Train 7 Project.
The webinar was part of the series of engagement by the 7,000-member strong NAPE, the largest umbrella group of technical professionals in Africa, with industry regulators and policy makers.
NAPE has, since April, hosted Mele Kyari, Group Managing Director of the state hydrocarbon company, NNPC, Sarki Auwallu, Chief Executive Officer, Department of Petroleum Resources, the regulatory agency and Timipre Sylva, Minister of State For Petroleum Resources.
SOURCE: newtelegraphng.com
