Nigeria has reduced royalty and corporate income tax on gas in new version of the Petroleum Industry Bill (PIB).
The country’s minister in charge of the oil, Timipre Sylva, who said this during a webinar hosted by the Nigerian Association of Petroleum Explorationists (NAPE) monitored by Platforms Africa, noted that this tediction was a part of incentives to aid the development of gas in the country.
The proposed bill was expected to be submitted before the legislators within a few weeks.
“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.
The bill, he 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 also will 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”.
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 hosted, since April, 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.