Professor Wumi Iledare
The recent CPI Oil & Gas Law Forum on the interface between the Nigeria Tax Act (NTA) 2025 and the Petroleum Industry Act (PIA) 2021 highlights both the progress achieved in petroleum fiscal reform and the challenges that remain.
From PEWI’s Petroleum Economics and Policy perspective, the NTA largely complements the objectives of the PIA by promoting tax modernization, supporting gas development, and strengthening fiscal administration. However, concerns regarding fiscal ambiguity, overlapping tax regimes, treatment of financing costs, and potentially excessive penalty provisions require urgent attention.
PEWI notes that the success of the NTA–PIA framework will depend less on legislative intent and more on its ability to provide
Fiscal certainty and policy stability;
Competitive investment conditions;
Clear and consistent regulatory interpretation;
Effective coordination among NRS, NUPRC, and NMDPRA; and
Continued support for gas commercialization and domestic energy security.
The recognition of decommissioning and abandonment costs as deductible expenses represents a positive step toward international best practice. Likewise, the codification of gas incentives aligns with Nigeria’s long-term objective of using natural gas as a catalyst for industrialization and a pragmatic transition fuel.
Nevertheless, unresolved questions surrounding hydrocarbon tax applicability, prolonged coexistence of multiple fiscal regimes, and disproportionate compliance penalties could weaken investor confidence if not addressed promptly.
PEWI therefore concludes that while the NTA and PIA are broadly aligned in strategic direction, government must prioritize clarity, simplicity, and predictability. The ultimate measure of success will not be the number of laws enacted, but whether the combined framework attracts investment, increases production, expands reserves, enhances government revenues, and delivers sustainable value to Nigerians.
In petroleum economics, certainty is often a more powerful investment incentive than generosity. The NTA–PIA interface should therefore be judged by its ability to reduce uncertainty and improve long-term value creation in Nigeria’s petroleum sector.
Wumi Iledare, PEofPE, FEI, FNAEE, SnrFUSAEE
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