Tank farm operators in Lagos state reject planned N300m levy

The planned imposition of a N300 million levy on owners of Tank farms in Ijegun has drawn the ire of the operators, even as the operators list the seector’s contribution to the economy.

There is no love lost, albeit, for now,between the Lagos State government and the operators and owners of tank farms in Ijegun, a suburb of the state. Under the aegis of Ijegun-Egba Tankfarm Owners Association, the group is challenging a N300 million levy imposed on each company by the Lagos State government for regularisation of drawings.

According to the association, the Lagos State Commissioner for Physical Planning, Idris Salako, at a stakeholders meeting on September 20, 2020, had accused operators and owners of the tank farms of operating illegally in Lagos State. It also alleged that members of the association do not pay any taxes, charges or fees to the Lagos State Government, including that their operations have destroyed infrastructural facilities within their operational areas. The commissioner was also believed to have threatened to immediately shut down Tank farms.

In a swift reaction, the Secretary of the Ijegun Tank Farm operators, Eshiet Eshiet, these statements have, to say the least, painted the operators of Tankfarms in very bad light, hence the need to make some clarifications in respect of its members’ operations.

According to the association, tankfarms at Ijegun have individually and collectively, expended over N2 billion in tackling some pressing infrastructural deficits and challenges within the corridor of operations and cannot incur further costs for regularisation that had been applied for in 2014. The association further noted that threatening to shut down their operations, which play a very pivotal part in petroleum distribution in Nigeria, accounting for 35 percent national petroleum product distribution is counter-productive.

Giving a breakdown of its intervention initiative, Eshiet revealed that in April, 2019, the association awarded a contract for the rehabilitation of the entire stretch of Marwa Road and reconstruction of Pioneer Road to Sappers Engineering Co Ltd (Nigerian Army Engineers) at the cost of N500,343,994.37. It listed the work scope to include the rehabilitation of all portions of Marwa Road, reconstruction of failed drainage, desilting the drainage etc. On Pioneer Road the scope included the reconstruction thereof with re-enforced concrete, reconstruction of the drainages etc. Sappers Engineering Co. Ltd (Nigerian Army Engineers) was chosen out of four Bidders based on their outstanding competence, expertise, discipline and trust, in order not to compromise standards. There was also an extension of the scope of work to cover Old Ojo Road from Finiger to Dantata Junction at an additional cost of N70,000,000.00.

Aside from the aforementioned interventions, the statement revealed that between 2018/2019, Wosbab Energy Solutions Limited, a member of the association, undertook the grading of Folarin Road and construction of culverts at the cost of N1,760,000.0012; from 2015/2019 the Association expended over N15,000,000.00 for palliative works on Marwa Road at several collapsed portions, especially after heavy rainfall.

Prior to commencement of operations, Eshiet said Stallionaire Nigeria Limited, a member of the association, constructed the access road at the cost of N64,200,000.00.14. “It is worth mentioning that Emadeb Energy Services Limited in May 2018 equipped an Information Technology Class with modern computer systems, internet, generator and accessories at Ijegun-Egba Primary School, Satellite Town, Lagos State. In 2020, in the storm of the pandemic, the association donated and made available palliatives to the community to cushion the effect of the hardship experienced at that time. These are just a few of the interventions that the association and member companies have undertaken to address the infrastructural deficits, environmental challenges and other CSR within the Ijegun axis,” Essiet said.

Legality

Eshiet revealed that contrary to the Commissioner’s remark, all members of the association are duly licensed and authorised by the Department of Petroleum Resources (DPR) to operate Petroleum Storage Facilities (Tankfarms) at Ijegun and have all requisite permits, licenses from all appropriate agencies of government to construct, own and operate Tankfarms, as well as engage in oil marketing and petroleum product distribution operations. He further said that member companies have their facilities mostly on the shoreline of the Ojo Creek Channel, with a considerable distance to community houses and were granted title by the Land registry, Federal Ministry of Lands and Housing to use same for industrial and/or commercial purposes.

“The cluster our members occupy was a wetland, of which rigorous sand filling and shoreline protection were undertaken at great cost, thereafter pilling in line with best practices to sustain the structures thereon. Regarding the regularisation of our members’ drawings with the Lagos State government, in 2014, our members through the association applied for regularisation. The government, at the time, was not keen at regularising same. Recently, when the government asked our members to submit documentations for regularisation, all our members complied. But to our greatest shock, each company is arbitrarily charged approximately N300 million,” he said.

Infrastructural outlook

According to the statement, the environmental outlook and challenges were apparent on the association’s entry into the Ijegun Shoreline for members to develop their respective facilities. He said the area was a wetland, without access roads. However, Eshiet noted, members’ commitment to improve the environment, safety and infrastructural deficits within the Tankfarm cluster and environ, made the association to undertake several collective projects and actions with a view to addressing some of the infrastructural deficits. He said the association has since 2013 been responsible for the maintenance, rehabilitation of Marwa Road and sections of old Ojo Road, the reconstruction of Pioneer Road and other roads within its operational environment.

Impacting the economy

Eshiet insists that Tankfarm operations have contributed immensely to the national economy by way of revenue through taxes, levies and charges to the Federal and State governments, as well as the local governments where the storage facilities are located.

Regarding payments to Lagos State Government, he submitted that the members of the association pay the following taxes, charges and fees to the state government: Lagos State Signage & Advertisement Agency (LASAA); Lagos State Environmental Protection Agency (LASEPA); Lagos State Government-PAYEE; Lagos State Government Development Levy; Radio and Television License Fees- Local Government; Land Use Charge; Wharf Landing Fees Collecting Authority; Lagos State Ministry of the Environment and Water Resources and Lagos State Waste Management Authority (LAWMA).

“From the above mentioned payments, it is very sad and embarrassing for the Hon Commissioner to publicly say that the Tankfarms do not pay taxes, charges and fees to the Lagos State government,” he concluded.

Source: The Nation