Oil Producers, NMDPRA Seek Strategic Alignment On Levy Collection

Oil producers in Nigeria and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) were progressing with discussion on the collection of the 0.5 per cent wholesale price levy.

While the NMDPRA argued that the oil producers should collect the levy and remit it into Authority’s bank account, the oil producers said the regulator should collect the levy.

However, the Chief Executive of NMDPRA, Farouk Ahmed, while speaking at a stakeholder engagement in Lagos, said the objective of the forum was to review issues and concerns raised during the first phase of the NMDPRA sensitisation programme.

Ahmed, who was represented by the NMDPRA Legal Adviser, Joseph Tolorunse, said: “Due to unresolved issues, NMDPRA has been overwhelmed with disagreements regarding the implementation of wholesale supply operations. At this stakeholders’ sensitisation workshop, the issues and concerns will be discussed and NMDPRA’s position on these concerns will be provided in an interactive manner.”

Also, the Vice Chairperson of Oil Producers Trade Section, OPTS, Gas Sub-Committee, Princess Edeimu Chukwumah, who represented Chevron Nigeria Limited, and James Makinde from Seplat and other representatives of the International Oil Companies (IoCs), argued against the producers collecting the levy.

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Reacting to the arguments, Tolorunse, while speaking to newsmen said: “one of the arguments raised is the implementation of collection of government revenues, especially the 0.5 per cent wholesale price of petroleum products and natural gas.

“The PIA makes provision in section 37 and 52 for collection of levies but the Act does not specify the entity to collect it. We have explained to them here, that the charges are not on the supplier but rather on the wholesale customers. It would be better to collect the levy at the wholesale point as it forms part of the wholesale price.”

He noted that, “since the Act was passed in 2021, the timing for implementation was part of our pushback as we need to pass regulations and also make guidelines that will specify the procedures for collection.”

He urged stakeholders to work together in enabling the operation of the guidelines that will pave the way for optimised midstream and downstream oil and gas operations in the country.