By Lawrence Audu
It is no longer news that President Muhammadu Buhari has declined ascent to the Petroleum Industry and Governance Bill (PIGB). The bill which has been a subject of controversy of which many Nigerians have often discussed mostly from an ignorant perspective, seeks to update the outdated Petroleum Act and replace its provisions with a more comprehensive and current legal framework that aligned with global standards.
Here are 25 things you need to know about the PIGB.
- The process began under Olusegun Obasanjo in 2000 with the establishment of oil and Gas Implementation Committee (OGIC).
2.The bill suffered a legislative set back after several redraft and wholesale amendment in the 6th Assembly.
- Various versions of the bill was harmonised by a committee set up by former petroleum minister Diezani Alison-Madueke.
4.The bill seeks to unbuckle the Nigerian National Petroleum Corporation and establish a ministry of petroleum and a Petroleum Regulatory Commission.
5.The bill seeks to establish Nigerian Petroleum Assets Management Company.
6.The bill is empowered to scrap the Department of Petroleum Resources DPR and Petroleum Product pricing and Regulatory Agency (PPPRA).
- The bill empowers the Commission to issue licences and permits for downstream gas, petroleum products, storage depots and retail outlets.
8.The Bill provides for a 5% levy to be used to fund the Petroleum Equalisation Fund (PEF).
- It also provides that PEF be funded through subventions, fees charges and surplus revenue recovered from petroleum products marketing.
- The bill empowers the PEF to determine the amount of disbursement due to any oil marketing firm.
- The PIGB has no provision covering the fiscal content of the draft law.
- The scope of the PEF is at variance with the provisions on the fund.
- The bill contains some legislative drafting concerns capable of creating ambiguity and conflict in interpretation of the final law.
- Other parts of the draft law are still pending which include: The Petroleum Industry Administration Bill (PIAB), Petroleum Industry Fiscal bill (PIFB), and Petroleum Host and Impact Communities Bill (PHICB).
- PIAB focuses on establishing a transparent production operation.
- PFIB deals with financial terms.
17.PHICB takes care of the rights and opportunities for local benefits.
- The bill guarantees 10 percent to the regulatory commission which will affect states’ monthly allocations.
- The bill empowers the commission to be directly undertaking community development projects which should have been channeled through the various entities that will be unbundled from NNPC.
- The bill provides an avenue for another power center with much money to throw around and competing with other development agencies.
- The host community fund will attract a lot of attention and capable of imposing an additive burden on the industry
- The bill does not make provisions for entities in Free Trade Zones.
- The regulatory functions of the minister of petroleum resources under the petroleum act and the oil pipelines act will be transferred to the commission.
- The PIGB requires government to privatise up to 40% of the NNPC’s shareholding within 10 years of the commission’s incorporation
- The bill provides that government must give up at least 10% of its shares within the first five years and an additional 30% over a period of another five years.