- We welcome senate’s passage of Petroleum Industry Governance Bill, but …
ALMOST 19 years after the process started, the Senate finally passed one leg of the five-part composite Petroleum Industry Bill – thePetroleum Industry Governance Bill, (PIGB) on May 25. First introduced in 2008, due credit goes to the current Senate for breaking the omnibus Petroleum Industry Bill (PIB) into disparate parts when it became clear that some aspects would not sail easy in its chambers.
In addition to the bill just passed, the four other bills still awaiting consideration are: the Petroleum Fiscal Framework Bill; Petroleum Industry Downstream Administration Bill; Petroleum Industry Revenue Management Framework Bill and the Petroleum Host Communities Bill.
Much as the Senate deserves commendation for finding a way round the log-jam, it should not be hard to detect, in the effort, an ingenious attempt to kick the problem down the road. For, while the storm raged over the so-called contentious provisions, notably the aspects of the bill concerning the host communities, what was also apparent is the failure by the lawmakers to play politics of accommodation; to forge a consensus on a bill that touches the very heart of the nation’s economy, as indeed the practice of fiscal federalism. If only on this, we think that the country deserves better from the Upper Chamber.
As for the bill, it is, no doubt, a major step forward. Among the key provisions, it proposes a new regulatory agency to be known as Nigeria Petroleum Regulatory Commission, NPRC to take over the functions of three agencies – the Petroleum Inspectorate, Department of Petroleum Resources (DPR), and Petroleum Products Pricing Regulatory Agency, PPPRA.
We cannot agree more with the need to terminate the reign of multiple regulators with overlapping functions or the retention of a superfluous agency like the PPPRA whose activities have become anachronistic in a liberalised industry environment; about time the industry settled finally for a truly professional regulator with enhanced powers.
The new bill also creates two new entities – the Nigeria Petroleum Assets Management Company and the National Petroleum Company. Whereas the former would take over the assets and liabilities of the Nigerian National Petroleum Corporation (NNPC), the latter would operate as a full independent commercial entity. To the extent that the NNPC is not just a cesspit of corruption, it is the very opposite of what a well-run technologically driven and commercially oriented state oil company should be, again, it seems about time the nation is rid of the contraption.
Significant also is that the bill whittles, considerably, the discretionary powers of both the president and the Minister of Petroleum Resources – although the latter retains the power to grant, amend, renew, extend or revoke any licence or lease required for petroleum or production, pursuant to the provisions of the Act or any other enactment. This provision seems the least to expect given the level of abuses that the presidency and the ministry have subjected the industry to, over the years. Surely, the time has come to insulate the operations of the oil industry from the whims and caprices of politicians.
Becoming a law is of course a long road ahead. First is the hurdle of securing the concurrence of the House of Representatives. Interestingly, the House has given the indication that it is in fact more favourably disposed to a holistic bill. Would the House settle for the Senate version; or will it go ahead to pass the omnibus bill? Second is the issue of the four pending bills – especially the Host Communities Bill. Are the lawmakers ready to make the necessary compromises given that the entire restructuring may in fact rise or fall – depending on whether or not equitable provisions are made for the host communities?
All said, we welcome the PIGB; we hope that it marks a new dawn in the efforts to rid the oil industry of its odious past.
