By Adewale Sanyaolu
The Nigerian Gas Association (NGA) has raised the alarm that certain statutory payments in foreign exchange (US Dollars) in Nigeria’s business environment are putting the naira under undue pressure.
NGA President, Mr. Akachukwu Nwokedi, disclosed this at a media parley with energy correspondents in Lagos at the weekend.
Akachukwu listed the various payments in dollars to include; royalties, fees, penalties, licenses and permits.
He argued that payment in dollars without providing a naira payment option for operators in the oil and gas industry should be reconsidered.
‘‘While the oil and gas industry is internationally denominated in dollars, the NGA suggests that allowing payments in naira equivalent would help alleviate pressure on the Nigerian currency, especially in this period of extreme FX fluctuations,” he said.
To further address some of the industry concerns, Akachukwu called for an immediate and critical review of the Petroleum Industry Act (PIA) after a wide stakeholder engagement and consultation to address impediments hindering investment and ease of doing business.
The NGA boss acknowledged PIA’s enactment in 2021 as a welcome development that provides regulatory clarity for the petroleum sector and specific provisions for the gas industry.
He also commended the fiscal aspects of the law for its potential to transform the gas sector but emphasised the need for a swift review of the PIA to address gaps currently hindering the gas sector’s growth.
According to him, other issues plaguing the industry as highlighted by NGA members are multiplicity of taxation and fiscal incentives.
The NGA President expressed concerns over the multiplicity of taxation within the PIA, noting that such taxation requirements increase the cost of doing business and in some cases, result in higher enduser gas prices and reducing the attractiveness and rapid adoption of natural gas.
On fiscal incentives, he said the need to develop commercial and fiscal terms for gas development (offshore and deepwater), to propel competitive investment is urgently required
‘‘There is also the need to review the fiscal incentives and develop commercial fiscal terms for gas development (offshore, deepwater and across the value chain), to propel competitive investment. This will boost and sustain gas supply to meet the nation’s needs,” he said.
Nwokedi emphasised the crucial role the NGA plays in advocating for the Nigerian gas industry, promoting new investments, protecting industry interests, and facilitating a just energy transition.
‘‘The NGA’s commitment over the next two years includes the following strategic focus areas; increased advocacy: The NGA aims to advocate for its members and the entire industry, promoting new investments and supporting the transition to cleaner energy sources.
“Supporting Decade of Gas (DoG) implementation, the NGA will actively participate in and coordinate the DoG initiatives, ensuring their successful and speedy implementation.
“The NGA will deliver industry events and training on gas specific and broader energy sector topics to enhance the knowledge and skills of industry professionals.
“NGA will foster improved communication between the association and its members through an integrated online membership ecosystem. It will engage in technical roundtables and other initiatives to enhance communication on industry governance and safety standards,’ he said.
He added that the NGA will fully implement a resource centre providing credible data and information about the gas industry while it would launch an annual training programme for energy editors to ensure accurate reporting and knowledge dissemination within the sector.
On global advocacy and investment promotion, he said the NGA will advocate for and promote investment opportunities within the Nigerian gas industry globally, leveraging its membership in the International Gas Union (IGU).
‘‘The association will continue to promote greater Nigerian involvement in the gas sector across the entire value chain. Diversity, Equity, and Inclusion (DEI), the NGA will drive the implementation of DEI initiatives among its members, promoting a more inclusive gas and energy sector. The NGA will consolidate industry views, expertise and experience to enhance the strategic focus of the association and energy sector,” he said.
Nwokedi noted that the parley’s objective is to inform about industry issues and solutions while establishing strong partnerships with the media.
‘‘By working together, the NGA and the media aim to ensure accountability and disciplined delivery of proposed initiatives, unlocking Nigeria’s potential to become a gas economic powerhouse.’’