Independent Oil Producers Demand Review Of Oil Industry Tax Structure

The Independent Petroleum Producers Group (IPPG) is demanding a review of taxes and levies currently imposed on oil industry operators in Nigeria.

The independent producer group observed that the Nigerian oil and gas industry remains the most taxed and levied in the country, and perhaps globally, with over 270 separate fees, taxes and levies.

It cautions that these fees from multiple Agencies, together with the cumulative burden, threaten to outpace the fiscal incentives introduced under the Petroleum Industry Act to attract and retain investment.

Speaking at the 2026 Nigerian Oil and Gas (NOG) Week in Abuja, IPPG Chairman, Adegbite Falade, said, “For smaller producers and operators of mature assets with thinner margins, this burden is a direct threat to project viability, investment decisions, and in some cases, asset abandonment.”

He urged the government to undertake a comprehensive harmonisation of all fees and levies across all agencies to eliminate duplication, ensure transparency in how these charges are computed and applied, and align the overall fiscal burden with the incentive-driven spirit of the PIA.

The IPPG boss said the passage of the landmark PIA provided a new legal framework that helped resolve several longstanding uncertainties across the industry, but added that the time is ripe for a comprehensive review of the act.

“Five years on, we believe the time has come for a comprehensive and all-inclusive review of the Act,” he said, “This provides an opportunity to address the practical and commercial realities of the PIA in a single and coordinated exercise which focuses on critical improvements that consolidates on the progress achieved to date, clarifies ambiguities experienced during implementation, and most importantly, strengthens the PIA by codifying into law the Presidential Directives and Executive Orders that have been widely applauded by the industry.”

The IPPG, however commended President Bola Tinubu’s administration for the genuine recovery in Nigeria’s oil and gas investment climate but warned that the country has twice failed to fully capitalise on major geopolitical disruptions to the global energy market.

Falade, told the delegates that Nigerian crude production has recovered from below 1 million barrel per day just a few years ago to an average of around 1.6 million barrels per day between January and May this year, with May output exceeding the country’s OPEC quota for the first in nearly a year.

On investment, Falade said the government has secured more than $8 billion in major upstream Final Investment Decisions (FIDs) since 2023, citing Shell’s $5 billion Bonga North project, a $2billion HI gas field development, and TotalEnergy’s Ubeta FID as examples.

He said 2025 alone saw 28 field development plans worth a combined $18.2 billion approved, unlocking an estimated $1.4 billion barrels of oil and 5.4 million cubic feet of gas.

Falade also said Nigeria’s share of the total upstream FIDs across Africa has risen from roughly 4 per cent a decade ago to nearly 40 per cent over the past two years, which he attributed to coordinated work among the government, regulators, security agencies, host communities, and operators.

Falade said for Nigeria to fully benefit from its hydrocarbon resources, it must build an industry that is resilient and investable before the next opportunity arrives, calling for urgent measures to be undertaken by all relevant stakeholders in addressing the following areas: a. A Shift in Government Posture: From Collector to Catalyst As we chart a path forward, we must confront a challenge that continues to erode industry-wide competitiveness – the sheer weight and multiplicity of fees, levies, and statutory charges imposed across the value chain. Today,