Energy Briefs
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THE federal government has approved the retention of four percent of royalties on oil and gas concessions and other revenues as the cost of collection by the Department of Petroleum Resources, DPR. This means that the agency will retain four percent of the total revenue it collects on behalf of the federal government and the other two tiers of government every month rather than depend on budgetary provisions for its operations.
The DPR is empowered by the Petroleum Act of 1969 as amended to collect royalties on producing concessions on behalf of the federal government. The money so collected is paid into a designated royalty account with the Central Bank of Nigeria, CBN, and credited to the federation account on monthly basis. By this approval, the DPR will no longer feature in the federal government budgeting process as its operations will now be funded from the four percent of the revenues it has been permitted to retain.
Bashir Yuguda, minister of state for finance, recently wrote a memo to President Goodluck Jonathan on the need to grant cost retention to the DPR as another agency that collects revenues for the government. Following the memo, the President granted the approval that set the DPR at par with the Federal Inland Revenue Service, FIRS, and the Nigerian Customs Service, NCS.
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FG Grants Energy Firms N19 billion Waivers
THE federal government has granted more than N19.662 billion in waivers and exemption to energy firms in the country in five months between January and May 2014. The amount is 51.23 percent of the N38.381 billion allocated to water resources in the 2014 budget; 31.48 percent of the N62.45 billion allocated to power; 31.75 percent of N61.928 billion allocated to petroleum resources; and 29.5 percent of the N66.645 billion allocated to agriculture.
Data from the Budget Office of the Federation, in the ministry of finance, indicated that oil and gas firms enjoyed about N18.881 billion in waiver and exemption, while power companies enjoyed N780 million.
The government is also committed to tackling the epileptic power situation in the country, and addressing the issue of estimated billing. Thus, it granted N326.174 million in exemptions to two prepaid electricity meter companies, Momas Electricity Meters Manufacturing Company Limited, and Mojec International Limited for the importation of metering facilities.
Specifically, Momas got two exemptions: the first worth N32.272 million for the importation of semi-knock down meters, one and three phase normal credit meters, one and three phase standard prepayment meters and all other related equipment. The second exemption was N163.69 million for the importation of meter plastic machines and accessories, compression mould machine and all other meter related equipment.
Mojec International got N130.213 million in exemption for the importation of machinery, equipment and components for single and three phase pre-paid meters. Indorama Eleme Fertilizer and Chemicals Limited accounted for 53.4 percent of the total waivers and exemption granted to energy firms in the period under review, with a total of N10.5 billion.
Specifically, Indorama enjoyed a N6.96 billion waiver for the importation of the machinery, equipment and spare parts for the utilisation of Nigeria natural gas to bring about an increase in power generation. The company was also granted a N3.54 billion waiver for the importation of fertiliser equipment, catalysts and chemicals, pile and spare parts among others.
Chevron Nigeria Limited followed, enjoying a waiver of N4.88 billion for the importation of machinery, equipment and spare parts for Escravos Gas to Liquids, EGTL, and a host of other pipelines. United Cement Company of Nigeria got N1.969 billion in exemption for the importation of machinery, equipment and spare parts aimed at boosting natural gas utilisation and power supply. NIPCO Plc got N1.087 billion in exemption for the importation of machinery, equipment and spare parts.
Other energy firms that got waivers and exemptions in the period are: Green Fuels Limited, N14.37 million, for the importation of machinery, equipment and spare parts for compressed natural gas to Independent Power Plants, IPPs. Edo Cement Company Limited, 240 million, for the importation of gas generators, plants, machinery, equipment and spare parts. Accugas Limited got N30.87 million in exemption for machinery, equipment and spare parts for pipeline; Exterran Nigeria Limited got N66.09 million in exemption for the acquisition of natural gas powered compressors and spare parts, while Procter and Gamble got N29.754 million in exemption for machinery, equipment and spare parts.
Others are Sumal Foods Limited, N42.878 million; federal ministry of power/Marubeni Engineering Corporation, N454.185 million and De United Foods Industries Limited, N19.978 million.
— Nov. 10, 2014 @ 01:00 GMT
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