Meanwhile, the joint Senate Committee on Petroleum Upstream, Downstream, Gas, Judiciary and Legal Matters, on Wednesday concluded its public hearing on PIB with a promise that the bill will be eventually passed into law.
But in quick reaction to this development, the Director-General of LCCI, Muda Yusuf said that there are some clauses in the Bill, which is detrimental to investments in the country’s oil and gas sector.
He believe that utmost care should be taken not to allow the drive for revenue jeopardise the equally important issue of attracting credible investors into the sector, preservation of the existing investments and the developmental impact of increased investments on the larger economy.
According to him, PIB does not go far enough in the restructuring and regulatory reform of government companies and regulators, which are so much needed to achieve government’s objectives.
He also expressed concern concerned that the PIB focusses more on revenue from gas while ignoring the profound impact that gas could have on national development.
“Nigeria has the 9th largest gas reserves in the world – and yet on average each Nigerian has only 40 watts electricity generation capacity while each South African has 800! Our members are paying huge bills for diesel and to maintain generators – we desperately need gas fired power to decrease our costs.
“Today we import goods we should produce simply because power is so expensive. If only we can increase our electricity capacity we can bring so many jobs back into our country.
“We have the potential for a gas powered industrial revolution through gas driven industries such as petrochemicals, fertilisers, iron and steel, aluminium smelter and cement; and, through exporting to create revenue. All these would have tremendous multiplier effects on the economy.
To unlock this value, infrastructure must be available to get that gas to customers. And we must tax gas at a level that still leaves investments attractive. Therefore, the proposal to increase taxes on gas from 30 per cent to 80 per cent needs be reconsidered.