PIB should provide competitive fiscal terms — Stakeholders
Stakeholders in the Oil & gas sector have expressed that the Petroleum Industry Bill (PIB) is expected to provide competitive fiscal terms, weed out unnecessary operating cost components, resolve Deepwater PSC disputes, and smoothen out the transition to new lease administration.
The stakeholders in a communiqué at the end of Nigerian Gas Association (NGA) Industry Multilogues held virtually last year December stated that, “There is a need for extensive stakeholder collaboration and interest alignment to progress the passage of the new PIB and secure clear, stable, and attractive climate for new investments required to realize broad economic aspirations for the country.
“The fiscal provisions in the new PIB should be modelled against global benchmarks to reduce or eliminate operating risks and boost investor confidence.
“Inputs into the new bill must consider the varied interests and seek a common position in addressing all issues that have been raised in the past 20 years of the PIB formulation.”
Part of the communiqué include the “Provisions of the law that encourage industry growth should be matched with practical and well-funded implementation programmes required to realize the goal of evolving a gas-based economy for the country.
“Emerging self-funding regulatory commissions and authorities proposed in the PIB should be underpinned by the entrenchment of transparency, accountability, and measurable performance parameters to avoid abuse of office and the whimsical imposition of levies and penalties.
“Regulatory changes that involve existing investments and active transactions should be implemented in phases to protect the commercial interests, avoid market distortions and guarantee returns for investors.
“The government should urgently fix the nation’s gas industry as the fastest way to boost manufacturing capacity and confront emerging competition in the ACFTA era. Despite her weak industrial capacity and low productivity, Nigeria still holds the potential advantage of fueling Africa’s manufacturing activities by leveraging on her gas resources.
“The government should improve the domestic operating environment with efficient factors of production to make Nigerian goods competitive in the coming ACFTA context.”
The 2020 NGA Multilogues kicked off with opening formalities at 10 am with an official welcome address by the NGA President, Mrs. Audrey Joe-Ezigbo.
The multilogues recommended close collaboration among players and stakeholders across the entire industry value chain to urgently reach consensus on a pricing framework the market can bear but which should be rewarding enough to attract growth investments, secure project funding and sustain supplies.
Multilogues added that, “Any pricing model to be considered must take into full cognizance, the peculiarities of the domestic operating environment.
“The multilogues also posited that liquidity issues that hamper returns from the power sector be speedily resolved to address legacy debts and facilitate full recovery of gas revenues from the Nigerian Electricity Supply Industry.
“The multilogues demanded better and more effective policy, fiscal and regulatory environment required to make gas industry operations in the country globally competitive.
“Gas policies in the upstream industry, including asset renewals, should guarantee the viability of gas projects to balance the government’s revenue targets and commercial interest of investors.
“The prevailing transitional pricing regime should be short-tenured to enable early migration of transactions to full commercial liberalization and allow competition to address concerns of affordability.
“The government should consider the use of direct subsidies to stimulate industrial growth rather than introduce pricing systems that distort market operations. Policies that affect investments should be clear enough to make investors determine recovery timelines.
“The NGA will continue to drive win-win policy advocacy for all stakeholders, whilst attracting international funding for local gas projects.”
In addressing the urgent need for Sector Legislation to Spur Wider Development and the viability of the PIB in advancing the sector as has been anticipated over the decades, panelists and speakers extensively discussed issues in the speeches, presentations and offered exceptional insights and expert opinions for the benefit of the hundreds of participants who joined the discourse online.
In carefully raising policy agenda in her welcome address, Mrs. Joe-Ezigbo stated, “We recognize and continue to advocate for a deepening of our domestic gas markets, as our true wealth as a nation lies not in the abundance of the resource, but rather in how extensively we are able to apply it towards various value-adding processes across different residential, commercial, industrial, petrochemical, power, agricultural, transportation, and other such sectors.”
