Nigerian energy firms got N23bn in govt waivers in 2013

Tin Can Island port09 January 2014, Lagos – The Federal Government granted a total of N23.493 billion as waivers and exemptions to energy firms and for energy-related activities in the year 2013.

The amount, according to documents obtained from the Budget Office, is mainly for import duty exemption and waivers for importation of plants, machinery, equipment, spare parts, gas generators and turbines, supply of captive power generator, dredging machinery and quarry equipment among others.

Specifically, a total of N18.495 billion was granted as waivers and exemptions for companies in the gas sector and for gas-related activities; N4.403 billion was granted to firms in the power sector and for power related imports, while the mining sector enjoyed waivers and exemptions valued at N595.43 million.

The documents showed that three firms — Shell Petroleum Development Company, SPDC, Total Exploration and Production Nigeria Limited and the Ministry of Power and Energy —enjoyed total waivers and exemptions of N18.27 billion, representing 77.77 per cent of the total.

Specifically, SPDC enjoyed the highest exemption of N8.5531 billion, for the importation of plants, machinery and spare parts.

Total E&P Nigeria followed with total exemptions of N5.568 billion, for the importation of machinery and equipment for Ofon Phase II; machinery and equipment for gas utilization, development, turbine and gas pipelines.

The documents from the Budget Office showed that Total E&P enjoyed exemptions on five different occasions, as the company carried out the importation of the items five times.

Thirdly, the Minister of Power and Energy enjoyed total exemptions of N4.173 billion for the importation of machinery and equipment.

Other firms who enjoyed significant waiver and exemption in the energy sector are: Ossiomo Investment Limited, Abuja — N671.28 million, for the importation of machinery and equipment spare parts for Nitrogen fertilizer and the Nigerian National Petroleum Corporation, NNPC, who got a waiver of N569.84 million for the importation of plants, machinery, equipment and spare parts.

Gas and Power Limited enjoyed an import duty exemption of N547.414 million for the importation of plant, machinery and spare parts for gas utilization, while the Federal Government granted Gel Utility Limited, Abuja, import duty exemption valued at N542.53 million for the importation of gas turbine, plants and machinery spare parts.

Indorama Eleme Petrochemicals Limited, Port Harcourt enjoyed an import duty exemption of N494.35 million for the importation of machinery equipment and spare parts, while Netco Dietsmann Corporate Limited, Abuja, got an exemption of N378.44 million for the importation of machinery equipment and spare parts for natural gas utilization.

Other beneficiaries of the waivers and exemptions in 2013 are Shoreline Power Company Limited, Procter and Gamble Nigeria, Ondo State Government, Flour Mills Nigeria Limited, Agip Oil, Frontier Oil, Notore Chemical Industries, Rivers State, among others.

The Nigerian Customs Service, NCS, had a couple of weeks ago, raised an alarm that import waivers and duty exemptions granted by the federal government, put at N603 billion between January and September 2013, has made it impossible for it to attain its revenue target for the year.

Abdullahi Dikko Inde, Comptroller General of the NCS, gave the breakdown as waivers granted on importation of petroleum products — N263.8 billion, import duty credit certificate — N86.4 billion; NDCC instrument —N59.5 billion; import substitution — N96.9 billion.

Others are revenue loss to manufacturers and assemblers put at N76.1 billion, revenue held in indemnities January to March 2013 on rice and sugar, drop in excise duty revenue due to close of some excise factories and de-excising of some excisable goods, and revenue loss to ECOWAS Trade Liberalisation Scheme for transaction entered in the economic sub-region.
*Michael Eboh, Vanguard

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