Expert Calls for Suspension of Tax on Gas

By Ahmed Rahma

The federal government has been asked by a Professor of Petroleum Economics and Policy Research and Director of Energy Information Division of the Center for Energy Studies, Mr Wunmi Iledare, to immediately suspend tax and other royalty on gas.

This call was made at an event organised by the Nigerian Association for Energy Economists (NAEE) in Abuja themed Energy and Petroleum in a Post Covid-19 Word.

In his presentation, Mr Iledare stated that tax and other royalty must immediately be removed to open up the sector for massive investment that would unlock the gas potential.

The expert, who believes that gas offers some windows in the face of the push away from fossil fuel, noted that the suspension should not mean zero royalty and tax to avoid mistakes that were hard to correct in the deep-water, especially the 1993 Production Sharing Contract.

He said, “Nigeria has the time frame to be able to adjust its way of thinking and know that the train is already moving more when it comes to energy transition dynamics. We are fortunate. We have gas, which is the transition fuel.”

Also speaking at the event, the Minister of State for Petroleum Resources, Mr Timipre Sylva, said it is unlikely the oil and gas sector would quickly recover.

Mr Sylva, however, noted that efforts by the Organisation of the Petroleum Exporting Countries (OPEC) and other allies as well as COVID-19 vaccination were yielding positive results.

“We are constructing critical infrastructure to boost industrial activities,” he noted.

On her part, the President of NAEE, Ms Yinka Omorogbe, stated that unnecessary time was being wasted on kick-starting reform in the sectors, especially the oil industry, stressing that signing the Petroleum Industry Bill (PIB) into law is only the first step towards needed reform.

“For once, get your policies right, make sure your laws align with your policies, pass the law. Why must it take several cycles of the National Assembly to pass a simple law? After you’ve passed the law, start to implement [it],” she said.