NEWS
Oil Industry Opposes Proposed 3% South-South Development Levy
The proposal seeking to compel oil and gas producing companies to contribute three percent of their annual budgets to the South-South Development Commission (SSDC) has met with stiff opposition from the oil industry.
Major oil industry operators and petroleum regulators on Wednesday cautioned that the levy may discourage investment and undermine the competitiveness of Nigeria’s petroleum industry.
The concerns were raised at a resumed public hearing organised by the House of Representatives Committee on the SSDC on a bill seeking to amend the South-South Development Commission (Establishment) Act, 2025, with a view to strengthening the commission’s funding framework.
The hearing brought together petroleum regulators, oil producers, government agencies and other stakeholders to scrutinise the proposed legislation before it proceeds for further legislative consideration.
The Chairman of the Committee, Julius Pondi, said the hearing was reconvened to accommodate critical stakeholders who were unable to attend the first session on July 8 because of their participation in the Nigerian Oil and Gas Conference.
He said the committee considered it necessary to hear from all relevant stakeholders, given the strategic role of the petroleum sector in the proposed amendment.
According to the Delta lawmaker, the amendment is designed to broaden the funding base of the commission to enable it to discharge its mandate of promoting sustainable development across the South-South region.
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He noted that despite serving as the nation’s economic backbone through crude oil production, maritime activities and industrial operations, the South-South continues to grapple with poor infrastructure, environmental degradation and other developmental challenges.
“We are particularly interested in receiving constructive contributions on the proposed funding framework, its sustainability, its implications for government and industry, as well as alternative proposals that can further strengthen the objectives of the legislation,” he said.
However, the proposed funding model drew strong reservations from industry regulators and operators.
Presenting the position of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC), the Chief Executive, Oritsemeyiwa Eyesan, represented by the Head of Regulations and Statutory Compliance, Kingsley Chikwendu, expressed support for providing the commission with a predictable and sustainable funding structure.
She, however, faulted the provision requiring oil-producing companies operating within the region to contribute three per cent of their total annual budgets to the commission.
Eyesan argued that the phrase “total annual budget” was not defined in the bill, creating uncertainty over how contributions would be calculated and enforced.
She maintained that the proposal failed to clarify critical issues, “including the basis for assessment, deductibility of payments, timelines for remittance, treatment of joint venture operations and companies with operations spanning multiple regions.”
According to her, the provision could effectively introduce another expenditure-based levy that companies would pay regardless of profitability or production levels.
The NUPRC also reminded lawmakers that upstream operators “are already subject to numerous statutory financial obligations, including petroleum taxes, royalties, the Niger Delta Development Commission (NDDC) levy, Host Community Development Trust Fund (HCDTF) contributions under the Petroleum Industry Act (PIA), the Nigerian Content Development Fund payments, environmental remediation obligations and abandonment fund contributions.
The commission urged lawmakers to carefully “evaluate the likely impact of the proposed levy on investment decisions, production costs and the competitiveness of Nigeria’s upstream petroleum sector.”
On its part, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) also echoed similar concerns.
Speaking on behalf of the authority, Senior Manager Ahmed Laido advised lawmakers to ensure that any additional funding mechanism aligns with the fiscal philosophy of the Petroleum Industry Act, 2021.
He said any new financial obligation “should strengthen investor confidence, promote regulatory certainty and support the Federal Government’s ease-of-doing-business agenda.”
Laido urged the committee to balance the funding needs of the commission with the need to preserve a competitive investment environment.
The strongest opposition came from the Oil Producers Trade Section of the Lagos Chamber of Commerce and Industry (LCCI).
Its Chairman, Bala Wudiri, argued that “oil companies are already making substantial statutory contributions under existing laws” and warned against creating another compulsory levy.
He cautioned that imposing an additional three percent contribution would “increase the financial burden on operators, duplicate existing obligations and weaken Nigeria’s attractiveness as an investment destination.”
Wudiri urged lawmakers to adopt a balanced funding model capable of strengthening the SSDC without discouraging investment in the oil and gas industry.
Despite the differing views, stakeholders unanimously supported the objective of accelerating development across the South-South region.
Most participants agreed that the commission requires adequate funding to deliver critical infrastructure and development projects but urged lawmakers to adopt a financing framework that does not undermine investment or increase the cost of doing business.
The SSDC was established to coordinate and accelerate development across the six states of the South-South geopolitical zone, addressing long-standing challenges such as inadequate infrastructure, environmental degradation, unemployment and the socio-economic impact of decades of oil exploration.
The amendment, currently before the House of Representatives seeks to strengthen the commission’s financial capacity by expanding its sources of funding.
However, the proposal requiring oil-producing companies to contribute three per cent of their annual budgets has emerged as the most contentious provision, with regulators and industry operators warning that it could overlap with existing statutory obligations under the Petroleum Industry Act and other extant laws.
The House Committee is expected to review memoranda and submissions from stakeholders before presenting its report and recommendations for consideration by the House of Representatives.
The Revenue Mobilisation, Allocation and Fiscal Commission (RMAFC) has commenced a fresh physical verification of disputed and newly drilled crude oil and gas well coordinates across nine states, in a move aimed at ensuring fairness and accuracy in the allocation of the 13 per cent derivation fund.
The exercise, covering the period from 2017 to date, was formally flagged off in Owerri, Imo State, on Wednesday, November 11, 2026, by the Commission’s Chairman, Dr Mohammed Bello Shehu.
The affected states are Delta, Ondo, Edo, Anambra, Imo, Bayelsa, Rivers, Cross River and Akwa Ibom.
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Speaking at the flag-off ceremony, Shehu described the exercise as critical to ensuring transparency, accuracy and fairness in the administration of derivation revenue.
He explained that the Commission has a constitutional responsibility to monitor revenue accruals and disbursements from the Federation Account and ensure equitable distribution of derivation funds among oil and gas-producing states.
The RMAFC chairman stressed that determining the exact coordinates and geographical positions of oil and gas wellheads directly affects the legal and financial entitlements of the respective states.
He consequently charged members of the Inter-Agency Technical Committee (IATC) and deployed technical officers to carry out the assignment with diligence, precision and professionalism.
Shehu insisted that every verified coordinate, technical assessment and physical observation must be sufficiently accurate to withstand statutory scrutiny.
According to him, the exercise will involve examining disputed and newly drilled oil and gas well coordinates, physically verifying affected wellheads, plotting their locations using approved maps and considering relevant court decisions in resolving outstanding disputes.
He also directed that the committee’s harmonised technical report and findings be submitted exclusively to RMAFC for ratification and formal adoption.
The Inter-Agency Technical Committee comprises representatives of relevant technical institutions, including the Office of the Surveyor-General of the Federation (OSGoF), the National Boundary Commission (NBC) and the Nigerian Upstream Petroleum Regulatory Commission (NUPRC).
The Imo State Governor was represented at the event by the Commissioner for Petroleum, Hon. Emeka Mgbudem.
Other government officials and RMAFC commissioners in attendance included Hon. Adamu Abdu Fanda, Chairman of the Crude Oil Committee; Hon. Oladele Semiu Gboyega, Chairman of the Gas Committee; Hon. Ismail Mohammed Agaka, Chairman of the Public Affairs and Communication Committee; Ambassador Ayuba Jacob Ngbako; Hon. Akpan Imo Effiong; and Hon. Helen Bob Inafa.
Also present were the Imo State Commissioner for Lands, Surveyor Clement Nwabichie; Commissioner for Finance and Coordinating Economy, Mr Chucks Chukwuemeka; and Permanent Secretary, Ministry of Lands, Dr Angelina Ohiri.
The Commission disclosed that the verification exercise had been conducted previously but was being repeated to ensure that all issues raised were adequately addressed.
Vice President Kashim Shettima has paid a courtesy visit to the Palace of the Oba of Benin, Oba Ewuare II, ahead of the All Progressives Congress (APC) presidential campaign rally in Benin City, Edo State.
Shettima arrived at the historic royal palace on Thursday to pay homage to His Royal Majesty, Omo N’Oba N’Edo, Uku Akpolokpolo, Oba Ewuare II, CFR.
The visit highlights the significance of the Benin traditional institution, which has preserved its rich cultural heritage, kingship, artistry and diplomatic traditions for more than seven centuries.
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The Benin Palace remains one of Africa’s most historic royal institutions, representing the enduring legacy and cultural identity of the ancient Benin Kingdom.
The Vice President is in Edo State to participate in the APC presidential campaign rally scheduled to hold at the Samuel Ogbemudia Stadium in Benin City.
As part of efforts to expand access to cheaper alternative fuel and reduce transportation costs, the federal government has commissioned five Compressed Natural Gas (CNG) daughter and last-mile retail stations in Lagos State.
The facilities, developed by the Ibile Oil and Gas Corporation (IOGC) with support from the Midstream and Downstream Gas Infrastructure Fund (MDGIF), were commissioned on Wednesday by the Minister of State for Petroleum Resources (Gas), Ekperikpe Ekpo.
Speaking at the commissioning, Ekpo said Lagos occupied a special place in the public-service journey of President Bola Ahmed Tinubu, noting that his administration was extending the development philosophy pursued during his tenure as governor to the national level.
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He said Lagos had demonstrated the importance of long-term planning, institution building, infrastructure development and the mobilisation of private capital for economic growth.
According to him, the federal government is applying similar determination through the Renewed Hope Agenda to ensure that Nigeria’s abundant gas resources support industrial growth, businesses, transportation and job creation while reducing the cost pressures faced by citizens.
“Through the Renewed Hope Agenda, the President has made it clear that Nigeria’s abundant gas resources must work for Nigerians. They must power our industries, support businesses, improve transportation, create employment and, ultimately, reduce the cost pressures faced by ordinary citizens,” he said.
The five stations are located in Idimu and Abule Egba in Alimosho Local Government Area; Ogolonto in Ikorodu West Local Government Area; Ajah in Eti-Osa Local Government Area; and Oko-Oba in Agege Local Government Area.
Each facility has a CNG compression capacity of 24,000 standard cubic metres per day and a storage capacity of 9,800 standard cubic metres.
The stations are designed as last-mile retail outlets to bring CNG closer to consumers in their residential and business locations.
Ekpo said the facilities would improve access to alternative fuel for motorists and commercial transport operators, while supporting the government’s objective of expanding cleaner energy infrastructure nationwide.
“These stations represent access. They represent affordability. And they represent the determination of government to take the benefits of Nigeria’s gas resources directly to the people,” he said.
He disclosed that President Tinubu had directed the expansion of CNG infrastructure across the country, including the development of an additional 500 refuelling stations towards a planned national network of 1,000 stations.
He said the initiative was aimed at ensuring that the benefits of the country’s gas resources translated into lower transportation costs for Nigerians.
According to the minister, expanding CNG infrastructure in Lagos would provide motorists and commercial transport operators with viable alternative fuel options, while bringing cleaner energy closer to consumers.
“Our objective is therefore not simply to count the number of stations commissioned. Success must ultimately be measured by impact: whether the infrastructure helps reduce operating costs for transporters and businesses, whether those savings reach commuters, and whether Nigerian families begin to feel tangible relief,” he said.
Ekpo said the Ministry of Petroleum Resources (Gas), in collaboration with the Presidential CNG Initiative, MDGIF, state governments, investors and other industry stakeholders, was working to expand refuelling and associated infrastructure to improve access to cleaner and cheaper fuel.
He commended IOGC and the Lagos State Government for embracing the initiative, describing the project as an example of the federal government, state governments and private sector working together to develop critical infrastructure.
The minister also praised MDGIF for its catalytic role in supporting gas infrastructure development, assuring investors of the government’s commitment to providing an enabling environment for investments to translate into physical projects and economic benefits for Nigerians.
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