Despite persistent concerns in Nigeria’s petroleum industry over the growing burden of taxes, levies, fees and other statutory charges imposed on operators, the Federal Government has approved a fresh $300 levy on helicopter operations, raising new questions about the cost of doing business in the sector.

The Nigerian Upstream Petroleum Regulatory Commission (NUPRC) weekend notified upstream petroleum operators, licensees and lessees of the application of the $300 Helicopter Levy for Air Navigational Services, payable to the Nigerian Airspace Management Agency (NAMA).

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The development comes amid continuing complaints from industry players that the accumulation of government charges is increasing operating costs and undermining investment in Nigeria’s oil and gas industry.

Field operations in the petroleum sector frequently depend on helicopters to transport personnel, equipment and other essential supplies to offshore installations and remote locations that are inaccessible by road, rail or other conventional means. The latest levy therefore has the potential to add another layer of cost to an industry already contending with high operating expenses and regulatory charges.

However, the NUPRC clarified that the Terminal Navigational Charge (TNC) would not apply to helicopter landings at private offshore facilities and petroleum platforms where the flights are directly undertaken in support of upstream petroleum operations.

In a circular signed by the Commission Chief Executive, Mrs. Oritsemeyiwa Eyesan, the NUPRC stated that the $300 helicopter levy remains payable to NAMA.

The clarification followed concerns raised by the commission on behalf of petroleum industry stakeholders regarding the introduction, structure and operationalisation of the charge.

The controversy dates back to March, when the Minister of Aviation and Aerospace Development, Festus Keyamo (SAN), constituted a Ministerial Review Committee to examine the levy and its implications for helicopter operators and petroleum industry activities.

Following the review, the Federal Government determined that the Terminal Navigational Charge would remain applicable to helicopter operations not undertaken in support of upstream petroleum operations.

Such operations include medical evacuation, private charter and agricultural activities, among other non-core petroleum-related uses.

The distinction means that while helicopters deployed for core upstream petroleum operations are exempt from the TNC when landing at private offshore facilities and platforms, flights associated with ancillary activities connected to oil and gas operations could still fall within the scope of the charge.

The development is likely to renew the debate over the expanding cost structure facing Nigeria’s petroleum industry, particularly at a time when the government is seeking to attract fresh investment, increase crude production and improve the competitiveness of the sector.

Industry stakeholders have repeatedly argued that multiple taxes, levies, regulatory fees and other statutory payments imposed by different government agencies create additional costs for operators and can discourage investment in new projects.

The latest clarification by the NUPRC is therefore expected to provide some relief to operators whose helicopter movements are directly tied to upstream petroleum activities, while leaving other categories of aviation services connected to the industry exposed to the $300 charge.