NUPRC and NMDPRA Warn Against 3% Oil Firms' Contribution

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) cautioned the House of Representatives regarding a proposed bill that would mandate oil companies to contribute three percent of their total annual budgets to the South-South Development Commission (SSDC). At a public hearing on the bill aimed at amending the SSDC Establishment Act, Kingsley Chikwendu, head of regulations and statutory compliance at NUPRC, expressed concerns about the lack of a definition for “total annual budget” in the proposed amendment.

He indicated that this ambiguity could lead to uncertainties in assessing contributions, liabilities, and deductibility. Chikwendu warned that if the proposal were enacted in its current form, it could impose an additional expenditure-based levy on companies, regardless of their profitability or financial conditions.

Ahmed Laido, a senior manager at NMDPRA, urged the committee to ensure that any new funding mechanism aligns with the objectives of the Petroleum Industry Act (PIA).