The 8th Senate has passed the PIGB which, when assented to by the President, will give birth to a new era for the Petroleum Industry in Nigeria. Most of the countries that established National Oil Companies as did Nigeria have actually developed their Petroleum Industries to benefit their citizens and nations especially in making electricity available as a free commodity which in my opinion can be implemented also in Nigeria.
After several years of attempts to reform the oil and gas industry in Nigeria, the watered-down version of the original Petroleum Industry Bill (PIB) may be on its way for Presidential assent with a 5% levy on fuel sold or distributed in Nigeria.
The story of genuine reform of the oil and gas industry in Nigeria started with President Olusegun Obasanjo who established an Oil and Gas Implementation Committee (OGIC) in the year 2000 – 18 odd years ago. The committee produced reports and policy documents that became the PIB as approved by late President Musa Yar’Adua. The PIB was forwarded to the 6th National Assembly but due to vested interests and lack of vision, the PIB was “watered down”. The PIB went through several re-drafts including a wholesale amendment by the executive arm of government at some point and was never passed by the 6th Assembly. Thereafter, the former Minister of Petroleum Resources, Mrs Diezani Alison-Madueke, formed a technical committee to harmonise the many versions of the original PIB out of which came the Petroleum Industry Governance Bill (PIGB) – Nigeria thus missed a rare chance of truly reforming the Petroleum Industry.
What the PIGB aims to achieve
■ Unbundle the Nigerian National Petroleum Corporation (NNPC)
■ Establish a Federal Ministry of Petroleum Incorporated.
■ Establish Nigerian Petroleum Regulatory Commission (NPRC) to replace the Department of Petroleum Resources (DPR) and the Petroleum Products Pricing Regulatory Agency (PPPRA). NPRC will issue licenses, permits, authorizations for downstream gas and petroleum products, storage depots, retail outlets, transportation and distribution facilities among other functions for the industry.
■ Establish Nigerian Petroleum Assets Management Company.
■ Establish Nigerian Petroleum Company (NPC) to replace NNPC. NPC is to be operated as a commercial entity that pays dividends in addition to Royalties and taxes.
■ Establish a Petroleum Equalization Fund (PEF) to be funded from the 5 percent fuel levy, subventions, fees and charges from petroleum products marketing companies.
It is imperative to reemphasize that the PIGB only deals with the governance and institutional framework of the Nigerian Petroleum Industry. This is only one aspect of the original Petroleum Industry Bill (PIB). The other key aspects of the hitherto watered-down PIB include the Petroleum Fiscal Framework Bill, the Petroleum Industry Downstream Administration Bill, the Petroleum Industry Revenue Management Framework Bill, and the most important of all (opinion mine), the Petroleum Host Community Bill.