…urges FG to prescribe Naira option for payment of federal dues and levies
The Nigerian Gas Association (NGA) has called for the refocusing of the National Gas Expansion Programme(NGEP) to promote the accelerated and broad utilisation of gas across sectors.
Akachukwu Nwokedi, President of the Nigerian Gas Association (NGA) made this call in an interview with interview with Hawilti and obtained by EnergyDay on Thursday.
According to him, NGA sees a need for the government to review the premise for the promotion of Compressed Natural Gas (CNG), Liquified Petroleum Gas (LPG), and Liquified Natural Gas (LNG) as alternative fuels to enable the development of appropriate strategies for their greater utilization.
He said, “Now that Nigeria offers a level playing field for gas with attractive pricing economics, more practical issues must be addressed around the availability, accessibility, infrastructure, safety, and convenience of using gas.
“For instance, even if LPG is 17% cheaper than PMS, switching comes with conversion costs that can be off-putting, particularly cheaper than PMS, but its adoption requires investments into conversion and the setting up of refueling stations,” the NGA President said.
The Nwokedi further commended the administration of President Bola Tinubu for the bold steps it has taken in driving key policy interventions and reforms since coming into office in May 2023.
According to him, key reforms worthy of mention are the forex harmonisation policy, PMS subsidy removal, Presidential CNG initiative(PCNG) and the signing of the Finance Act and the Electricity Act.
He said, “The removal of petrol subsidy is an opportunity for the country to maximise the use of gas to give the citizenry a credible and more reliable alternative.
“We believe that in the long term, natural gas will dominate Nigeria’s energy mix, based on Nigeria’s huge gas resources as well as global and local energy transition goals.
“The PCNGI which targets over 11,500 NEW CNG-enabled vehicles and 55, or CNG conversion kits for existing PMS-dependent vehicles, seeks to ease the impact of fuel subsidy removal on the citizenry by reducing energy costs using CNG as an alternative fuel,” Nwokedi said.
He further mentioned that Nigeria’s plan to be net zero by 2060, must be backed with efforts to maximise the value and use of natural gas.
He stated that the NGA will continue to advocate the twin challenges of energy security and energy transition.
“To get there, Nigeria needs to test the current policy, legal, and regulatory frameworks against the level of investment attracted and continue to engage the industry to adjust where necessary.
“The framework must have clear and measurable investment objectives and targets and relevant government functionaries must be tasked on these targets as a means of assessing performance.
“To improve the ease and cost of doing business, we also need to improve the speed to market by streamlining the contracting cycle with the regulators and harmonising the approval process of projects,” the NGA President said.
Nwokedi further emphasised that to reduce the pressure on Naira, the Government could also prescribe, through law or regulation, the option for payment of Federal Government dues and levies in Naira equivalent.
He said, “The payment of royalties, fees and penalties, licenses and permits in US dollars without a Naira option remains a major challenge for the industry players across the value chain.
The NGA President mentioned that improving the fiscal terms is another way to encourage gas investments.
He therefore stated that Nigeria will continue to face a multiplicity of taxation and an inconsistency of fiscal policy.
He said, “The key primary legislature in this regard are the PIA 2021 and the Finance Act, 2023.
“NGA sees a need to review fiscal incentives and develop commercial and fiscal terms for gas development to propel competitive investment. particularly the offshore and deep-water,” he said.
The NGA therefore concluded by saying because the power sector is the biggest domestic off-takers of gas, we need to address the legacy debts currently standing at some $800million. It stated that the Decade of Gas initiative is currently studying the framework to deal with legacy debts.