Nigeria is 'Drafting Gas Fiscal Policy'
Nigeria’s petroleum minister Emmanuel Ibe Kachikwu has said the country's federal government is in the process of instituting a fiscal policy for the oil and gas sector.
He told attendees at the National Council on Hydrocarbons on November 20 that the Nigerian cabinet (federal executive council) was in the process of approving a new fiscal policy that would set out to address Nigeria’s energy 'trilemma' - its three major challenges namely: addressing energy availability; enhancing energy accessibility; and promoting energy availability. (It was the cabinet that also published Nigeria's National Gas Policy (NGP) in June which, among other things, called for a doubling of Nigeria's gas-fired power generation capacity to 10 gigawatts by 2020.)
According to Kachikwu, the fiscal policy will enhance fiscal neutrality and create a fiscal basis that will encourage investments and market developments while putting in place competitiveness reforms and cost efficiency for the benefit of both government and the industry operators.
He said there is a need for oil and gas infrastructure development projects to be financed and managed through private sector participation, and that a new fiscal policy would fast-track the development of the such private sector-led downstream infrastructure for effective competition and efficient service delivery.
The need for a fiscal policy cannot be over-emphasised. At the Nigeria Gas Summit conference in September 2017, Chiagozie Nwokonko, the lead energy resources partner at Nigerian law firm Streamsowers, and Kohn told attendees that there was a need for a strong fiscal policy for the sector. Nwokonko said that the NGP alone could not be a basis for significant investments, as the playing field will not be level for all kinds of investors. He maintained that the NGP would work better with an appropriate political, regulatory, fiscal and structural petroleum framework.
The National Council on Hydrocarbons, inaugurated by the Buhari administration in 2016, is an ombudsman council that meets to review oil and gas policies and their impact on the country.