Nigeria’s indigenous oil producers have appealed to the Federal Government to reduce the heavy tax burden on companies operating in the country’s oil and gas industry. According to the Independent Petroleum Producers Group (IPPG), the sector is currently faced with more than 270 different taxes, fees, and levies, making it one of the most heavily taxed industries in Nigeria and possibly the world.
Speaking during the opening ceremony of the 2026 Nigerian Oil and Gas (NOG) Week in Abuja, IPPG Chairman, Adegbite Falade, said the growing number of charges imposed by different government agencies is putting serious pressure on operators. He explained that while the Petroleum Industry Act (PIA) introduced incentives to attract investment, the increasing number of taxes is reducing the benefits of those reforms.
Falade noted that smaller oil companies and operators managing older oil fields are the most affected because they operate with lower profit margins. He warned that the high cost of doing business could force some companies to abandon projects or delay new investments.
To solve the problem, the IPPG called on the government to harmonise all taxes and levies collected by different agencies. The group said this would eliminate duplicate charges, improve transparency, and create a fairer business environment for investors.
The association also urged the government to review the Petroleum Industry Act, which has now been in operation for five years. While describing the law as a major step forward for the industry, Falade said practical challenges experienced during implementation show that some sections need improvement.
According to him, reviewing the Act would help remove unclear provisions, strengthen the legal framework, and formally include the Presidential Directives and Executive Orders introduced in recent years to improve investment in the sector.
Despite its concerns, the IPPG praised President Bola Tinubu’s administration for improving Nigeria’s investment climate. Falade said government reforms have helped restore investor confidence and encouraged fresh investments in the upstream oil sector.
He revealed that Nigeria’s crude oil production has risen from less than one million barrels per day a few years ago to an average of about 1.6 million barrels per day between January and May 2026. He added that production in May exceeded Nigeria’s production quota set by OPEC for the first time in almost a year.
Falade also highlighted major investment achievements recorded since 2023. These include over $8 billion in Final Investment Decisions (FIDs), featuring Shell’s $5 billion Bonga North project, the HI gas field development worth about $2 billion, and TotalEnergies’ Ubeta project.
He added that in 2025 alone, authorities approved 28 field development plans valued at approximately $18.2 billion. These projects are expected to unlock an estimated 1.4 billion barrels of oil and 5.4 million cubic feet of gas, strengthening Nigeria’s energy future.
According to the IPPG chairman, Nigeria’s share of upstream investment decisions across Africa has grown significantly—from about four percent ten years ago to nearly 40 percent over the past two years. He credited this progress to improved cooperation between the government, regulators, security agencies, host communities, and industry operators.
Falade concluded by urging all stakeholders to continue working together to build a stronger, more competitive, and investment-friendly oil and gas industry. He stressed that reducing excessive taxes and creating a stable business environment would allow Nigeria to fully benefit from its vast oil and gas resources while attracting more local and foreign investors. He also thanked President Tinubu, government ministers, regulators, and other industry leaders for their support in advancing the sector.
