Lagos — Minister of Petroleum for States Resources, Timpre Sylva has promised to look into the possibility of gas pricing in both naira and dollar.
He made the pledge during the Nigerian Association Petroleum Explorationists, NAPE’s August webinar series held on Thursday.
Themed ‘Fiscal Regime, Design, Government Revenue & Investors Interest in Nigerian Oil & Gas Sector’, the minister while fielding questions from journalists on gas pricing, said the matter would be presented before President Muhammadu Buhari on the possibility of including naira in payment options.
Although he said payment for the product is influenced by the international pricing standard, however, the Minister said he was willing to present the challenge before the President who doubles as the Petroleum Minister.
“The oil and gas industry is dollar-based globally, and that is why we price things in dollars even here in Nigeria. But now, I will have to take the issue up again and see the possibility of payment in both naira and dollars,” he said.
Payment for gas in dollars has been one of the front burner issues especially for indigenous power generation companies who most of the times complain of high exchange rate of dollar to naira.
Speaking on the impact of the COVID19 pandemic on investors revenue and investments in the sector, Mr Sylva said government is interested in reducing taxes and royalties on oil and gas assets as a way of encouraging more oil exploration and investments.
“The current recession has led to low demand for crude oil and it has affected everybody. Nigeria’s oil and gas sector faces uncertainties and it is time to re-jig the framework which is the PIB to reduce taxes and royalties on oil and gas assets”, he said, adding that low taxes and royalties would go a long way at cushioning the adverse effect of the pandemic on oil and gas firms operating in-country.
According to him, it has become imperative for Nigeria to diversify to a non-oil economy to battle recession caused by low crude oil demand and low revenue.
“The effect of the coronavirus is going to be with us through out 2020 and beyond. Countries are currently battling with low incomes, and revenue from oil and gas alone can not continue to fund the economy,” he said.
On whether the federal government is planning on cushioning the effects of the pandemic by offering palliatives to investors, Mr. Sylva stressed that palliative would come in form of fiscal terms that would encourage a business friendlier environment than what is currently obtainable.
“As a government, we are not in the best financial state to give palliatives to anybody due to adverse effects from the COVID-19 . The best we can do is to make sure that the framework is easier for operation,” adding that the Department for Petroleum Resources, DPR is also reviewing some of its regulations for operators.
He said the government is looking at a long term oil price of $50 per barrel, stressing the need to also shift attention to renewable energies.
“Oil and gas is facing huge competition from renewable energies and Nigeria needs not to be left out,” he added.
The Coronavirus pandemic had forced down revenues of mostly oil-based economies such as Nigeria. As a result, the World Bank says recession is imminent and puts world economic GDP declining rate at 4.5 percent in 2020.
Speaking on timeline for passage of the revised Petroleum Industry Bill, PIB into law, the minister said he was unsure.
He, however, gave a time frame of not more than six months the Bill is expected to stay at the National Assembly.
He added that the federal government is currently persuading the NASS to suspend its annual recess to fast track passage of the Bill.