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NIMASA, LNG at loggerheads over unpaid N24bn freight rate

By Godwin Oritse

THE Nigerian Maritime Administration and Safety Agency (NIMASA) and the Nigerian Liquified Natural Gas Company are currently at each other’s throat over the latter’s blatant refusal to pay  its statutory three per cent freight rate of over N24billion.

While NIMASA is claiming that the gas company is owing the  Federal government through the agency an accumulated freight on gas export, NLNG is saying that they have a tax holiday of ten years which will expire in October 2009.
Sources close to  NIMASA told Vanguard that the NLNG has deliberately refused to pay the money that has accrued over the years, adding that the gas company has deployed all means to avoid the payment.

While NIMASA is also claiming that the NIMASA Act empowers it to collect the rate, NLNG is saying that they are exempted from paying as the company has guarantee that will not make government change the rules in the middle of  the business thereby  exempting it from paying.

Besides, while NIMASA is claiming that the tax holiday for NLNG expired in September 2007 being the year it commenced gas production, NLNG is however saying that its tax holiday will end in October 2009 being the year it first exported gas.

Speaking to Vanguard in defense of his organisation, the media and communication officer of the Nigerian Liquified Natural Gas company, Mr Ifeanyi Mbanefo said that NIMASA cannot blame them for their failures adding that NIMASA is looking for cheap money.
Asked if the 3 per cent freight rate will be part of the taxes the company will pay at the expiration of the tax holiday, Mbanefo said that the company will study the law, adding that if the rate is part of the payable taxes, it would pay.

He said “We will do as the law says, I do not make the laws, NIMASA does not make the laws, the National Assembly is reviewing all laws about Oil and Gas industry, but laws that target particular people are the ones the shareholders of this company are against.

“People do not create one business and create another one to feed it, it does not work, it does not even make sense.
“You do not have a good register, that is where NIMASA should start from, we should look at what NIMASA ought to do that it is not doing, they are looking for cheap money I am sorry to say that, the money they would not work for.
“This  Federal Government has given the shareholders a guarantee that will not change the rules mid-way.
“NIMASA is very wealthy, you cannot do port, you cannot do anything without getting to them, but they filter away their money .

“Why is NIAMASA when we were  exempted and they are asking the National Assembly to reconsider, this is an acceptance of the fact that they know that we are exempted
“Forget all the claims they are making because the claims have to be checked out.
“They complain that we have twenty-four vessels all flying foreign flags, yes we have to fly foreign flags because we do international business, if we fly Nigerian flag we cannot do it, it is obvious to everybody in this industry and that is where they should start.

“Why are we making very shallow analysis”
NIMASA in an effort to compel NLNG to pay the money went to the National Assembly seeking the assistance of lawmakers in collecting the money.
In a Memorandum the management of NIMASA submitted to the House of Representatives Committee on Gas Resources, the maritime regulatory agency requested the Committee to reconsider the tax and levy exemption currently being enjoyed by the NLNG .

Part of the Memorandum reads “ In the light of the foregoing, we commend the gracious initiative of our honourable members in this regard and kindly request you to reconsider the tax and levy exemptions currently enjoyed by the NLNG and ensure henceforth they pay income tax and other statutory levies especially the NIMASA’s 3 per cent levy to enable the agency effectively carry out its multifarious functions of promoting maritime safety and the development of indigenous commercial shipping”

The Memorandum which was signed by Mr Matthew Egbadon, Director of Legal services of NIMASA said that available records shows that company has long exceeded the average sales price of gas.
Egbadon in NIMASA’s Memorandum to the Committee agreed that although , the law exempts  NLNG from paying taxes, but added the same Act provides that the tax and levy holiday period granted NLNG will only last for ten years from the production day and terminates at  the first anniversary date after the first five years of when the commutative average sales price of liquified natural gas reaches US3Dollars per m


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