‘It’s impractical’ — gas producers fault 0.5% infrastructure fund levy

Wholesale gas producers under the aegis of the Oil Producers Trade Section (OPTS) say the implementation of the 0.5 percent midstream downstream gas infrastructure fund (MDGIF) levy retroactively is impractical.

Princess Edeimu-Chukwumah, vice-chairperson of the OPTS gas sub-committee, spoke at a stakeholders sensitisation programme in Abuja on Wednesday.

She said Section 52 (7a) of the Petroleum Industry Act (PIA) puts the responsibility of fee collection on the NMDPRA.

“You’ve been empowered by the PIA section 52-7A to do what you are asking us to do. And in the regulation, 23 section 13-2 you’ve been empowered to be the collector,” Edeimu-Chukwumah said.

She also mentioned the issue of delayed payments from some customers, specifically power-generating companies, with outstanding debts dating back to 2011.

This, she said, makes it unreasonable to expect producers to remit funds they have yet to receive.

On his part, Farouk Ahmed, chief executive officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), said the agency remains committed to addressing the implementation of the 0.5 percent levy imposed by the MDGIF under the PIA.

Ahmed acknowledged the concerns raised by the gas producers and suppliers regarding the collection of the development fee.

He assured them that a re-evaluation of the levy would be conducted to ensure compliance with the PIA.

Ahmed, represented by Francis Ogaree, executive director of hydrocarbons processing plant, installation and transportation infrastructure at the NMDPRA, highlighted the importance of resolving the issues to meet current and future demands for wholesale gas and petroleum liquids.

He added that a full-scale workshop would be organised to provide clarity on the contentious issues and align stakeholders on the implementation of wholesale gas and petroleum liquid supply operations.

Speaking further, Ahmed highlighted the benefits of the wholesale supply framework, noting that it encourages investment throughout the petroleum value chain, improves hydrocarbon measurement transparency, and supports ethical market practices.

“These licences are the appropriate licences for entities engaged in, or wishing to engage in, the sale and delivery of natural gas and petroleum liquids, for domestic use or exports,” he said.

Ahmed added that the PIA represents a significant evolution from the 1969 Petroleum Act, shifting focus from production and exports to domestic energy security.

He said it is the collective responsibility of stakeholders “to ensure that current and future wholesale gas and petroleum liquids supply demands are met”

“This is not only pivotal to our national economy but also integral to the global energy market,” he added.

The NMDPRA CEO called on stakeholders to implement guidelines for optimised oil and gas operations, infrastructure development, and collaborations to grow Nigeria’s energy sector.