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FG to amend gas flaring laws, make flaring more expensive-Report

January 29
06:22 2018

The federal government is concluding plans to make gas flaring costly for companies to improve its revenue generating stream.


In an interview with Bloomberg, Kemi Adeosun, minister of finance, says the senate will modify the laws on gas flaring penalties to recoup loss of revenue running into billions of dollars.

She said over the years, government spending was largely dependent on oil income and this had blinded it to tax revenue accruable to the nation.

Commenting on the new revenue generating scheme, Adeosun said instead of paying a “penalty”, a tax- deductible charge will apply on gas flaring activities of companies operating within the oil and gas industry.


“In the legal framework for the gas-flaring penalty, it was drafted as a charge. “A charge is tax-deductible,” she said.

“So, what do the international oil companies do? They flare, they pay the charge on which they get tax relief. That’s just bad drafting.

“The government is approaching lawmakers to amend the law and have the word “penalty” replace “charge”.


“Just that one word has potentially cost us billions of dollars.”

In 2017, the senate had declared that Nigeria loses $2.5 billion yearly to gas flaring.

In March of the same year, a bill for an “Act to Prohibit Flaring of Natural Gas in Nigeria and Other Matters, 2017,” passed second reading in the upper chamber of the national assembly.

The bill was established to “help provide a strong legal framework for effective monitoring and regulation of gas activities in line with current realities.”


It was also set up to address the inadequacies of the nascent 1979 Act by stipulating adequate penalties on gas flaring activities of companies.



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