Experts in Nigerian oil and gas downstream sector have encouraged the federal government to provide tax incentives and subsidies that will stimulate production in the gas sector.
This fiscal policy consideration was proposed by the Managing Director of Raffles Energies Limited, Dr. Billy Okoye at the ongoing 17th OTL Africa Downstream Week, in Lagos, today.
Okoye, who retired as a Group Executive Director, Ventures and Business Development, NNPC, commended the federal government for the bold decision to end the fuel subsidy regime which he described as a consumption-based incentive, stressing however that gas development in the nation requires production-driven incentives.
Speaking with OTL Media on the sidelines, Okoye maintained that provision of tax holidays will significantly enhance indigenous as well as foreign investments in the gas sector, even as it would also underline the government’s commitment to developing the sector.
He equally opined that the nation has to prioritize the development of the requisite human capital and expertise needed for its lofty national gas-driven economy.
On his part, the moderator of the panel session and Coordinator, Decade of Gas, Mr. Ed Ubong posited that with the right infrastructure and policies, Nigeria could easily double its gas consumption in less than 5 years.
Ubong, who is also the President of Nigeria Gas Association (NGA), called for more collaborations between investors, operators, and regulatory agencies in a bid to galvanize industry stakeholders towards the realization of the nation’s gas goals.
Meanwhile, the Managing Director of Starz Investments Company, Ms. Iroghama Ogbeifun observed that private companies have difficulty convincing financial institutions to disburse loans because banks perceive that there isn’t sufficient clarity in the sector.
Iroghama, however, expressed confidence in the regulations of the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA), noting that she inquired at the regulatory performance from Starz operational officers and obtained satisfactory remarks.
Also speaking, the Executive Vice Chairman, OTL Africa Downstream Week, Dr. Emeka Akabogu explained his preferred approach for incentives.
“There is no doubt about the importance of incentives to the gas sector or any sector that intends to drive development. The only concern is the type of incentives. Cash incentives have been promoted across most sectors in Nigeria but I’m not in support of that. While I agree that there is a need for incentives, such incentives should rather be in form of tax reliefs,” Akabogu said.