Nigeria seeks to unlock gas investments amid stakeholders’ worry

In a bid to attract greater investment in its gas sector, Nigeria’s Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has assured stakeholders of its commitment to addressing issues surrounding the implementation of the 0.5 per cent levy imposed under the Petroleum Industry Act (PIA).

At a stakeholders’ sensitization program in Abuja, NMDPRA Chief Executive Farouk Ahmed acknowledged the concerns of wholesale gas producers and suppliers, particularly regarding the Midstream Downstream Gas Infrastructure Fund (MDGIF).

He assured participants that the authority would reevaluate the levy to align with the provisions of the PIA.

Ahmed emphasised the transformative potential of the Petroleum Industry Act, noting that it marked a shift from the production and export-focused Petroleum Act of 1969 to a framework that prioritises both domestic energy security and exports.

“Wholesale supply operations under the PIA aim to foster investments, enhance transparency, ensure compliance with domestic obligations, and create a level playing field for market participants,” Ahmed said.

He also introduced recently published guidelines on wholesale gas and petroleum liquid supply operations, highlighting licensing frameworks, eligibility criteria, and collaboration opportunities to maximize the benefits of the PIA.

Despite the potential benefits, wholesale gas producers, represented by the Oil Producers Trade Section (OPTS), expressed significant reservations as they argued that implementing the 0.5 per cent levy retroactively is impractical because many gas supply contracts were signed long before the PIA’s enactment.

Chairperson of the OPTS Gas Sub-Committee, James Makinde and Vice Chairperson Princess Edeimu-Chukwumah cited Section 52-7A of the PIA, which they contend places the responsibility for fee collection on the NMDPRA rather than producers.