Oil & Energy
DAPPMAN Raises Concern Over FG’s New Tax Regime
The Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) has expressed concern over the new 0.5 per cent tax on gross turnover of the petroleum marketing firms proposed by the Federal Government.
Executive Secretary, DAPPMAN, Mr Olufemi Adewole, said at the maiden edition of the Platforms Africa Continental Forum in Lagos, that the tax would put many firms out of business.
Adewole said there were indications that fuel distribution crisis may soon hit the country, if the government implemented the new tax regime.
He was emphatic that more than half of the fuel marketing firms in Nigeria would close down, if the tax burden was slammed on them.
According to him, the imminent closure of businesses poses threat to the smooth distribution of petroleum products across the country.
“The petroleum marketing firms’ trading margin is too small that they cannot pay such amount sustainably.
“Petroleum marketers operate a very low margin but the turnover is very huge. Unfortunately the margin does not correspond with the turnover,” said Adewole.
He added that the margins they made when fuel sold at N40 per litre was the same when the price rose to N160 per litre and N200 per litre respectively.
According to him, “The Finance Act 2020 says the marketers have to pay 0.5 per cent from their gross turnover by the end of this year.
“It is unimaginable that probably half of the petroleum marketing firms existing now may go under, if the new tax regime is implemented.
“Except the regulator which is Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) approves a new margin for the marketers.”
He said the association had called on government to give petroleum marketers access to foreign exchange at the official Central Bank of Nigeria (CBN) rate to enhance the supply and distribution of Premium Motor Spirit (PMS) across the nation this yuletide season.
According to DAPPMAN, shortage of foreign exchange (forex) coupled with several unauthorised levies, bad roads are among the factors making fuel importation and distribution burdensome for members.
The Tide source reports that the fuel marketers recently bemoaned the acute scarcity of forex in the official market, which is currently threatening the importation, distribution and impacting deeply on prices of petroleum products across the country.
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Delta Targets 120MW Power Boost, Moves To Cut Reliance On National Grid
The State Commissioner for Works (Rural Roads) and Public Information, Charles Aniagwu, disclosed this at a press conference in Asaba, weekend, noting that the initiative was part of wider reforms aimed at opening up the power sector to private investors.
Aniagwu, who was accompanied by the Executive Assistant to the Governor on New Media, Felix Ofou, said the state was exploring alternative sources of electricity to support businesses, households and communities while reducing pressure on the national grid.
He said the government was particularly interested in exploiting Delta’s abundant natural gas resources for power generation, pointing to the Kwale Free Trade Zone, which is part of the state’s special economic zone, as a major opportunity for investors.
According to him, prospective investors were taken to the zone during the state’s recent economic summit to enable them to assess the availability of gas as a key raw material for electricity generation. ComparePower Rates
The commissioner explained that generating more electricity locally would not only increase supply in Delta but also free up power on the national grid for use by other consumers.
Aniagwu cited the 8.5MW Independent Power Plant located behind the state secretariat in Asaba as an example of what could be achieved through alternative power sources.
He said the facility had enabled the secretariat complex to operate independently of the national grid, thereby making the electricity that would otherwise have been consumed there available to other users.
He added that the planned 120MW partnership with Supply Power would further strengthen the state’s electricity supply capacity and provide a more reliable power base for small and medium-sized enterprises.
Aniagwu said the state government was also intervening in areas traditionally regarded as the responsibility of electricity distribution companies because inadequate power supply could no longer be allowed to constrain economic development. LearnQuantum Physics
He identified the extension of the electricity grid from Abraka towards the Ndokwa axis as one of the interventions being undertaken to connect more communities to electricity.
The commissioner, however, raised concerns over the burden placed on communities that are often required to provide transformers and other electricity infrastructure, only for distribution companies to take over the facilities and subsequently collect electricity bills without adequately accounting for the investments made by the communities.
He said the state would continue to support efforts aimed at energising communities, noting that improved electricity supply would stimulate businesses, create jobs and help tackle social problems associated with unemployment and idleness.
On regulation, Aniagwu said the government was working with the Ministry of Energy and a committee set up to develop an appropriate regulatory framework for the state’s emerging power sector. SwitchEnergy Plans
He said the proposed energy commission would be responsible for regulating new electricity producers, determining appropriate tariffs and overseeing distribution networks.
The commissioner stressed that liberalising the sector required effective regulation to protect consumers and investors, adding that decisions on power distribution infrastructure, including the use of overhead or underground lines, must take into account the peculiarities and safety requirements of each location.
He warned that power expansion without adequate regulation could expose residents to electrocution and other hazards, stressing the need to protect electricity infrastructure while ensuring consumers were not subjected to unfair pricing.
Aniagwu said the state government’s broader objective was to build an efficient and sustainable electricity market driven by private investment and capable of powering businesses, households and communities across Delta State.
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