PIB: Examining issues and determination to break jinx

As the 9th National Assembly (NASS),  sets to break the jinx of failure of processing the Petroleum Industry Bill ( PIB) into an Act within the last 14 years, TAIYE ODEWALE examines the issues at stake.

Historically, as declared by the President of the Senate, Ahmad Lawan at different fora last year, the Petroleum Industry Bill ( PIB), has more or less become a jinx to be broken, having defied all efforts to successfully transform it into an Act through required legislative processes since 2007 when it was introduced as an executive bill to the 6th National Assembly then.

Accordimg to Lawan, since then to 2019 when the 8th National Assembly adjourned sine die, the bill defied all efforts to make it an Act either through non-passage for third reading by both Chambers of the National Assembly or refusal of Presidential Assent even when it scaled the hurdle of passage in NASS.

The problem, he explained, arose from the fact that each of the series of the bill considered in the 6th, 7th and 8th National Assembly lacked collaborative efforts or inputs of both the executive and legislative arms of government resulting into either failure to scale third reading in NASS or gets presidential assent when passed.

“The jinx this time around, will be broken by the 9th National Assembly since the required synergy between the executive and legislature  for making it an Act of Parliament is there,” he said.

 Further reassuring Nigerians of the readiness cum determination of 9th National Assembly to get the bill passed and assented to, by President Muhamnadu Buhari, Lawan on Tuesday last week during his 62nd birthday celebration declared: ”  PIB is like a demon. People both within and outside the country, are ready to work against it as they have been doing for the past fourteen years.

“But the 9th Senate and by extension, 9th National Assembly, will defeat the demon this time around  with the current bill before both Chambers .

“The patriotic zeal, sheer determination and unity of purpose by all serving senators across party lines, to do this latest by the end of first quarter of this year, will be deployed on the bill immediately the Senate resumes on 26th of this month the way it did with Deep Offshore Oil Production Sharing Contracts in October 2019”.

According to him, for 20 years, foreign forces and local collaborators, frustrated efforts to amend the Deep Offshore Oil Production Contract Act, but got defeated in October 2019 with passage of Amendment to the Act by both Chambers of the 9th National Assembly with attendant financial and economic gains for the country .

His words: “Those against the move in 2019, even threatened to leave the country, but the 9th National Assembly stood its grounds in getting the previously fraudulent Act, amended with passage of the bill which was assented to by President Muhammadu Buhari on a Sunday in far away London.

“The main purpose of PIB which will later become Act, when passed and assented to by President Buhari, is to make the oil sector investments friendly for both local and foreign investors with attendant economic gains for the country.

“Through, the required competitive environment will be provided for businesses to grow and investors made their gains as well as Nigerians getting values for their monies and governnent getting more revenues”.

But as determined as members of the  9th National Assembly are, in breaking the jinx of PIB, will they be able to agree on all the issues contained therein? 

One of such issues which infact stalled the passage of the bill during the 7th National Assembly was the 10% allocation proposed for host communities in the oil producing areas from proceeds made by the oil firms operating there which had been reduced to 2.5% in the current bill before both Chambers of the 9th National Assembly for consideration.

Generally, the new PIB forwarded to the 9th National Assembly by President Muhammadu Buhari as an executive bill for consideration, seeks to (i)Convert the Nigerian National Petroleum Corporation (NNPC), to a private limited liability company (NNPC Limited) and scrap the Petroleum Product Pricing Regulatory Agency (PPPRA); (ii) Establish separate regulatory authorities for the operations of the upstream, midstream and downstream sectors;

(iii) Decrease the royalty rate for offshore fields producing a maximum of 15,000 barrels per day to 7.5% from the current10%;(iv) Raise the royalty threshold of crude oil price to $50 per barrel from $35 per barrel; (v) Reduce petroleum profit tax for onshore fields to 72.5% from 85% and decrease royalty payments to 18% from 20%; and (vi) Disincentivize gas flaring by making its penalties non-tax deductible etc .

As stated in the bill, when passed, it  will make the oil sector more competitive and help attract more domestic and foreign investors as it proposes to make  NNPC become a separate limited liability company with enhanced capacities for  inflow of both foreign and domestic investors. 

The proposed law as explained in the draft bill,  will also aid the deregulation of the oil sector to help attract more investors to the downstream sub-sector just as it 

will help with the development of oil infrastructure, which will boost Nigeria’s oil production and export revenues. 

 Private investors as proposed in the draft bill,  will help in the rehabilitation and development of the new oil refineries with attendant increase in  aggregate oil outputs and drastic reduction of Nigeria’s reliance on imported refined oil.

It also seeks to end the flaring of gas, a major source of waste and environmental pollution, particularly in oil exploration areas.

As promising as proposals made in the bill are, would federal lawmakers from oil producing areas or better put, communities; agree to the drastic reduction of host communities financial  benefits from operating oil firms from 10 to 2.5% as contained in the new bill? 

Time will definitely tell when debate on the bill commences at both Chambers of the National Assembly.

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