FG moves to streamline 270 oil industry taxes, levies

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The Federal Government has commenced efforts to streamline the over 270 taxes, levies, and statutory charges imposed on operators in Nigeria’s oil and gas industry by commissioning global consulting firm PwC to undertake an international benchmarking of the country’s fiscal regime.

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The Minister of State for Petroleum Resources (Oil), Heineken Lokpobiri, disclosed this on Tuesday while responding to concerns raised by indigenous oil producers during the opening ceremony of the 2026 NOG Energy Week in Abuja.

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The minister’s comments came shortly after the Chairman of the Independent Petroleum Producers Group, Adegbite Falade, criticised the multiplicity of charges in the sector, describing Nigeria’s oil and gas industry as perhaps the most taxed and levied in the world.

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Falade had urged the Federal Government to harmonise the numerous taxes and levies imposed by various government agencies, warning that the cumulative burden was eroding the competitiveness of operators, discouraging investment and threatening the viability of mature oil assets.

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Reacting to the concerns, Lokpobiri admitted that the complaints were valid but said the government had already initiated concrete steps to address them.

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“When the Chairman of IPPG was talking, he made mention of the multiplicity of fees and rents. It’s been a major concern that Nigeria has over 270 fees, taxes and rents in this sector. It is true. But that doesn’t mean we’re not doing something about it,” he said.

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According to the minister, the Federal Government has been engaging industry stakeholders on the issue since it was brought to its attention and has now commissioned PwC to compare Nigeria’s fiscal charges with those of competing petroleum-producing countries.

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“Our attention was drawn by OPTS to this matter. And since then, we’ve had several engagements, and I’m happy to announce to you that part of the steps we’ve taken is to commission PwC to do a global benchmarking. IPPG, together with NUPRC, came together under my directive to commission PwC to do a global benchmarking,” he said.

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Lokpobiri explained that while the figure of over 270 taxes and levies appears alarming, many of the charges involve insignificant amounts but still require operators to go through lengthy administrative processes.

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“Sometimes when you hear that you have 270 taxes and levies, the amount may be small. Some could be cents. Why do you take the same paperwork to pay $1m as you want to pay one cent?” he queried.

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The minister said operators had complained that they were forced to process hundreds of invoices for charges worth only a few cents or dollars, increasing compliance costs and reducing operational efficiency.

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“From the report I got from OPTS, they said, ‘Look, even the volume of fees they want to pay for the legal processing is three cents, five cents, or one dollar. Why don’t we group all together? If I’m paying, can’t I pay everything once instead of making the company process 270 invoices?” he quoted the operators.

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He said the benchmark exercise would determine how Nigeria compares with other oil-producing jurisdictions and guide reforms aimed at making the country’s petroleum industry globally competitive.

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“What I’ve directed is that PwC will do the survey and do global benchmarking. What are the fees and rates in other jurisdictions? Nigeria has committed to being globally competitive. So let us benchmark it against other jurisdictions in the world. That report will soon be ready, and I think that will resolve that problem once and for all,” Lokpobiri stated.

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The minister maintained that the Tinubu administration had consistently demonstrated its willingness to address genuine concerns raised by investors and industry players.

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“The point I’m making in that response is that this is a government that, since President Bola Tinubu came into office, any genuine issue raised has been addressed. Any time issues concerning this industry are raised, we sit together with stakeholders, and we address them. And this is one issue that we have also been able to address,” he said.

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Earlier, the IPPG chairman warned that Nigeria’s oil and gas industry was weighed down by an excessive number of fiscal obligations despite reforms introduced under the Petroleum Industry Act.

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“As we chart a path forward, we must confront a challenge that continues to erode industry-wide competitiveness – the sheer weight and multiplicity of fees, levies and statutory charges imposed across the value chain.

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“Today, the Nigerian oil and gas industry remains the most taxed and levied in the country, and perhaps globally, with over 270 separate fees, taxes and levies,” he said.

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Falade argued that the cumulative burden of charges imposed by multiple government agencies was beginning to outweigh the fiscal incentives created under the Petroleum Industry Act to attract fresh investments.

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“These fees from multiple agencies and the cumulative burden threaten to outpace fiscal incentives introduced under the Petroleum Industry Act to attract and retain investment. For smaller producers and operators of mature assets with thinner margins, this burden is a direct threat to project viability, investment decisions and, in some cases, asset abandonment,” he stressed.

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He urged the Federal Government to harmonise all fees and levies imposed across the industry to eliminate duplication and improve transparency.

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“We therefore urge the government to undertake a comprehensive harmonisation of all fees and levies across all agencies to eliminate duplication, ensure transparency in how these charges are computed and applied, and align the overall fiscal burden with the incentive-driven spirit of the PIA.

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“A predictable, streamlined and globally competitive cost environment is a prerequisite for the very growth, job creation and production gains this administration seeks to achieve.”

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The planned PwC review is expected to provide the Federal Government with a comparative assessment of Nigeria’s fiscal charges against those of competing petroleum jurisdictions as the administration seeks to attract more investment into the oil and gas sector while boosting crude oil production and improving competitiveness.

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