Except urgent steps are taken to address the heavy tax regime being slammed on gas producers across the country, fresh investments in gas processing and production may continue to elude the country.
A consultant to Annoh Gas Processing Company (AGPC), a subsidiary of Seplat, Olusola Aina, stated this during the Institute of Change Management(ICM) webinar learning series with the theme; The Nigeria Gas Policy: Prospects and the Change Management Implications held in Lagos at weekend.
Aina, who is also a fellow ICM and the guest speaker lamented that the huge tax burden on gas producers was seriously impacting on their bottom line.
He said governments at various levels do not take into consideration the overhead costs of gas producers by coming up with tax regimes which often time are not favourable to them.
The gas expert worried that unfavourable tax regime was negatively impacting new gas investments and expansion of production capacity for those already in the business.
To address the imbalance, Aina opined that government should hands off pricing fixing in the gas sector, saying the continue hold of government in that regard was a major disincentive to the growth and development of the gas industry.
Rather, he said the role of government should essentially be that of providing a conducive environment where businesses will thrive.
The ICM Fellow maintained that government should hands off its grip on the sector in order to allow players determine the pace of things through a willing-buyer willing-seller arrangement.
On government policies, Aina commended the Federal Government for coming on board with the National Gas Master Plan(NGMP), but questioned the failure of similar past policies.
‘‘The NGMP is a good initiative that will help unlock the gas potential of the country. But beyond that, we should be able to ask questions and scrutinise why similar policies floated in the past failed to achieve the desired objective.’’
He explained that the objective of NGMP, which is an initiative of the Federal Government, was aimed at developing the country’s gas potential in Compressed Natural Gas (CNG), Liquefied Natural Gas (LNG) and Liquefied Petroleum Gas (LPG).
He added that to achieve the NGMP initiative in the areas of CNG, LNG and LPG, there should be a fasttrack to achieve the target. This, he said, should be backed up with finance from the private sector, government and multilateral agencies.
Esan disclosed that the pool of funds to develop gas infrastructure will further help to boost job creation because the investment profile will include the setting up of cooking gas cylinder plants, auto gas plants and the resuscitation of some moribund car assembly plants to prepare them for the take-off of CNG cars.
He added that modular refinery for gas would also be included in the investment profile alongside gas processing and petrochemical plants.