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Relief as OGFZA begins downward review of tariff for free zone investors

As part of renewed efforts of the management of the Oil and Gas Free Zones Authority (OGFZA) led by Umana Okon Umana to ease the process of doing business and further attract investors, it has started downward review of prevailing taxes and tariffs.

The proposed reduction in tariffs is one of the measures being taken by OGFZA to boost economic activities in the oil and gas free zones. Last month, OGFZA launched its strategic roadmap to transform its operations, and a marketing brochure that unveiled a bouquet of incentives to free zone investors.

Umana, who gave the hint recently at Onne, Rivers State, was responding to series of complaints by licensed investors on high tariffs applicable in the free zones.

The investors had protested that the Industry Wide Standard Tariffs (IWST) being enforced in the free zones were negotiated and signed only by the National Petroleum Investment Management Services (NAPIMS), ExxonMobil, Shell, Intels, Addax, NOAC, Total and Chevron without the input or involvement of other investors in the free zones.

According to them, it was unfair to impose such a tariff regime on everyone when the process that produced it was not inclusive.

In their submission, they called for another review and renegotiation where all parties, including NAPIMS, OGFZA, the IOCs and other licensees, to go back to the drawing board and agree on a new tariff structure that will take care of the interest of the IOCs and other licensed investors in the free zones.

Responding, Umana revealed to the aggrieved investors that a meeting was ongoing with the NAPIMS, Intels and other relevant stakeholders to agree on a regime of tariffs that is fair to all the parties involved.

He explained further that the schedule of the tariffs being implemented was approved by NAPIMS “without the input of the OGFZA,” contrary to Section 25 of the Oil & Gas Free Zone Act Cap 05, LFN 2010 and Section 11 and 39 (4) of the Oil & Gas Export Free Zone Regulations 2003”.

Industry experts say Section 11 of the Oil & Gas Export Free Zone Regulations 2003 states that “The Authority shall issue schedule of tariffs which shall apply in the free zone and which shall be reviewed from time to time and copies made available to the licensees or operators,” while Section 32 (4) of the same regulation gives OGFZA the “right to review tariffs for operations in the free zone from time to time.”

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