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Dangote to FG: Ensure single-digit tax regime to encourage investment in oil and gas sector

Dangote to FG: Ensure single-digit tax regime to encourage investment in oil and gas sector
May 29
21:00 2022

Aliko Dangote, president and chief executive officer (CEO) of Dangote Group, says his oil refinery will promote Nigeria’s prospects of transforming into a regional refining hub.

Dangote spoke at the 2022 Nigerian Content Midstream and Downstream Oil and Gas Summit which was held recently in Lagos, according to a statement issued on Sunday by Tony Chiejina, chief corporate communications officer, Dangote Group.

The billionaire business magnate was represented by Babajide Soyode, technical consultant, Dangote Industries Ltd.

Dangote also called on the government to ensure a single-digit tax regime to encourage investment in the downstream sector.

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He said the refinery being constructed in Ibeju-Lekki, Lagos, would guarantee the availability of high-quality, environmentally compliant products in Nigeria, regional markets in West Africa, Southern Africa, and inter-continental markets.

According to him, the refinery would also promote competition for local refining in Africa by encouraging existing large refineries to upscale, which would result in surplus products for exports.

“Dangote Petroleum Refinery will guarantee adequate fuel production for domestic consumption and availability of excess products for export which will help to stabilise our domestic currency,” he said.

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“It will lead to upgrading and expansion of the Nigerian National Petroleum Company Ltd. refineries and promotion of prospects of Nigeria’s transformation to a regional refining hub.”

Dangote emphasised the need for the federal government to invest more in quality infrastructure to reduce the importation of refinery equipment that would ordinarily be sourced in Nigeria.

He said the development of specific, sustainable equipment manufacturing and services should be the focus of the Nigerian Content Development and Monitoring Board (NCDMB).

“Funding of a project should be to ensure that a substantial part of the product’s plant must be of Nigerian origin; the same applies to goods and services,” he added.

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“Government should ensure a single-digit tax regime to encourage investment in the downstream sector.”

Also speaking, Simbi Wabote, executive secretary, NCDMB, restated the government’s target to increase domestic refining capacity to 1.4 million barrels per day in the next five years.

Wabote said this was being done by rehabilitating the existing four national refineries and providing strategic support for setting up private-owned greenfield and modular refineries in the country.

“Combined refining capacity of more than 1.4mbpd is expected from these focus areas within the next five years,” Wabote said.

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“About 400,000bpd is expected from the rehabilitation of NNPC refineries in Port Harcourt, Warri, and Kaduna using target performance of not less than 90 percent of nameplate capacity.

“The greenfield element of the roadmap covers the 650,000bpd Dangote Refinery in Lagos and the 200,000bpd BUA Refinery in Akwa Ibom.”

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On his part, Farouk Ahmed, chief executive officer, Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), said there were huge opportunities in the oil and gas value chain.

Ahmed said the authority would continue to enable business in the sector.

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He noted that the enactment of the Petroleum Industry Act (PIA) had introduced a governance framework for the industry with a clear delineation of roles between regulation and profit-centric business units.

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