End the dithering on Petroleum Industry Bill

The lingering controversy on the Petroleum Industry Bill (PIB) deepened sharply along regional lines, recently, as Northern leaders took a firm stance against the bill that provides for a law for the regulation of the nation’s oil industry. Specifically, Northern political leaders kicked against Sections 116 – 118 of the bill. The sections provide for the establishment of a Petroleum Host Communities Fund (PHCF) for the development of the economic and social infrastructure of the communities within the petroleum producing areas. Section 118(1) says “each upstream petroleum company shall remit, on a monthly basis, 10 per cent of the net profit… into the Fund for the benefit of the petroleum producing littoral states”. The argument of the North is that the provision for this Fund will not benefit the Northern region of the country, which they say is already starved of funds on account of the 13 percent derivation allocated to oil producing states in the country under the extant revenue allocation formula, and the huge allocations to the amnesty programme and the Niger Delta Development Commission (NDDC). Some Northern leaders have reportedly vowed to use their majority strength in the National Assembly to stop the bill, which has, however, scaled its second reading.

Other controversial aspects of the PIB include its provision for payment of higher taxes, including company income tax, by the International Oil Companies (1OCs), and its perceived over-concentration of power in the hands of the Minister of Petroleum. The continuing dithering on the PIB is unfortunate. It is sad that a bill that is expected to revolutionize the legal framework for the nation’s oil industry and put the sector on a firmer pedestal for the benefit of the country has been in such dire straits over the years. It will be recalled that the very first version of this bill was drafted by the National Council on Privatisation/Bureau of Public Enterprises (NCP/BPE) in 2005/2006, shortly after the approval of the National Policy on Gas in 2005, and the 2005/2006 draft formed the basis of different versions of the bill, including the latest 2012 draft that is now in stormy waters in the National Assembly. There is no arguing the fact that the enactment of a petroleum industry law for Nigeria is long overdue. All oil-producing countries have a law regulating how the industry should be run. Nigeria should not be an exception.