The Oil Producers and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has disagree over the collection of the 0.5% petroleum wholesale price levy. The NMDPRA insisted that oil producers should collect the levy and remit same to the appropriate banks; while the producers argued that the regulator should handle the collection directly.
NMDPRA Chief Executive, Farouk Ahmed, represented by the Authority’s Legal Adviser, Joseph Tolorunse, explained that the engagement aimed to address issues raised during the first phase of the NMDPRA’s sensitization program.
“Due to unresolved issues, NMDPRA has been overwhelmed with disagreements regarding the implementation of wholesale supply operations”.
Emmanuel Cofie-Spiff of Oando Plc noted that the players do not have issues with the Petroleum Industry Act (PIA). However, some gaps have been identified, and those gaps should be resolved. But the NMDPRA believes that, as oil producers, we should collect the levy and remit it.
Tolorunse said, “The PIA, in sections 37 and 52, provides for the collection of levies but does not specify which entity should collect them. We have explained here that the charges are not on the supplier but rather on the wholesale customers. It would be more efficient to collect the levy at the wholesale point as it forms part of the wholesale price”.
He further explained that since the PIA was enacted in 2021, timing for implementation has been delayed due to the need to pass regulations and develop guidelines for collection procedures.
Tolorunse urged stakeholders to collaborate in enabling the implementation of these guidelines to optimize midstream and downstream oil and gas operations in Nigeria.
