The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), have advised the House of Representatives against the move for oil companies to contribute three percent of their total annual budgets to the South-South Development Commission (SSDC).
Represented by the head of regulations and statutory compliance, Kingsley Chikwendu, the NUPRC dropped the advice at a public hearing on a bill seeking to amend the SSDC Establishment Act.
He said the phrase “total annual budget” is not defined in the proposed amendment, creating uncertainty regarding the basis for assessment, determination of liability and deductibility of the contribution.
“If implemented in its current form, the proposal could effectively introduce another expenditure-based levy payable, irrespective of profitability, production levels or the prevailing financial condition of affected companies,” he added.
Also presenting the position of the NMDPRA, a senior manager, Ahmed Laido, called on the committee to ensure that any additional funding mechanism aligns with the philosophy and investment objectives of the Petroleum Industry Act (PIA).