‘Use Single-Digit Oil Tax to Woo Foreign Investments’ – Dangote tells FG

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Nigerian government has been urged to establish single-digit tax regime in the oil and gas industry, in order to attract investments into the country’s downstream sector.

The President of Dangote Refinery, Aliko Dangote, made the call last weekend even as his conglomerate prepares to usher in the much expected Dangote Refinery, which is projected to begin operation between 2022 and next year.

In the address presented on his behalf by his technical consultant, Babajide Soyode, at the just concluded maiden edition of the Nigerian Content Midstream and Downstream Oil and Gas Summit, held in Lagos, Dangote said government should ensure a single-digit tax regime to encourage investment in the downstream sector.

His call is coming on the heels of the regrettable exit of international oil companies (IOCs) in the downstream sector. Some of the foreign oil firms on their way out of Nigeria include Shell and ExxonMobil.

He affirmed that his refinery will help to stabilise Nigerian crashing local currency by stuffing the local market with products and providing excess to international market.

“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.

The 2-day summit on ‘Nigerian Content Midstream/Downstream Oil & Gas, organized by the Nigerian Content Development Management Board (NCDMB).

In his address at the event, the executive secretary of the Nigerian Content Development and Management Board (NCDMB), Mr. Simbi Wabote stated that given Nigeria’s 10-year Strategic Roadmap to achieve 70% local content in the oil and gas sector by the year 2027, great opportunity abound to maximize potentials in the midstream and downstream sectors in critical areas.

According to him, there are vast business opportunities in the midstream to downstream sectors ranging from processing, transportation, storage, and distribution that could be started on small scale and later scaled up to bigger enterprises thereby growing in-country capacities and capabilities.

The NCDMB boss informed that the profit margin increases towards the maximum in the downstream sector especially in the LPG value chain where the profit margin is highest at the distribution end of the value chain.

According to him, this serves as incentive to attract wider number of players into the downstream business thus spreading prosperity across board instead of spreading poverty.

He reminded the stakeholders that recent events in Europe have further buttressed the fact that every nation must develop and implement a strategic policy to ensure its energy security policy.

While defining energy security as the uninterrupted availability of energy sources at an affordable price, Wabote insisted that energy sources must be in ready-to-use form for the populace which means values from the midstream and downstream sectors must have been added thereby making the sectors very important pieces in the energy security narrative.

He highlighted that NCMBD’s development goal goes beyond the oil and gas but has linkage to other sector of the economy covering construction, ICT, agriculture, research and development, education, and others.

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