PPPRA Administrative Charges in the Nigerian Gas Market will Disincentivize Investments

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Monday, March 15, 2021 / 10:00AM / by Ottoabasi Abasiekong for WebTV / Header Image Credit: WebTV


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The administrative charges of the Petroleum Products Pricing and Regulatory Agency (PPPRA) which amounts to N1.23k will disincentivize investments in the Nigerian Gas market.


 

Mr. Adesola Borokinni an economist with Proshare Research made this point while discussing his perspective on "Achieving a Viable & Efficient Nigerian Gas Market".


 

Borokinni stressed the point that the gas market in the country is already deregulated and the step taken by the PPPRA to introduce an administrative charge, was counter-intuitive to the government's plan to reposition Nigeria as a strategic global gas hub.


 

He said if this continues it could hamper the 2020-2030 gas decade plan to move Nigeria into the phase of becoming a major global gas and energy-producing nation.

 


The charge according to him would lead investors to explore alternative markets apart from Nigeria and called for urgent policy steps to address the issue.

 


He noted that the key stakeholders in the gas industry have kicked against the step taken by the authority, and the economist noted it was time for a broad-based approach to gas industry development.

 


From a policy and legislative perspective, he was of the view that the delay in passing and signing the Petroleum Industry Bill (PIB) was posing a challenge to the Oil and Gas (O&G) industry.

 


"Under the PIB there is provision for the Midstream and Downstream Regulatory Authorities that would carry out oversight functions and also empowers them to come up with a Gas Infrastructure Fund," he said.


 

He advised the government to minimize its intervention in the price structure but stated that they could wade in when there are cabalistic tendencies in the industry.


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Citing Australia as an example, he listed the following features that make it a leading gas market Nigeria should emulate;

  • Gas Deliverability
  • Gas Affordability
  • Gas Availability
  • Constant Engagement with Stakeholders



Charting a pathway for the future of the O&G industry in Nigeria, Borokinni outlined major areas that should be given top priority in the country, including;

  • The need to minimize the complexities in the industry
  • Facilitating local gas production and utilization which is currently  44% of total supplied.
  • Transparency and accountability will be strengthened with the unbundling of the Nigeria National Petroleum Corporation
  • Effective project development in the gas industry
  • Providing robust gas infrastructure

 

 

Nigeria's proven gas reserves according to the Department of Petroleum Resources (DPR) is over 203.16 trillion cubic feet.


 

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