The passage by the Senate of the revised Petroleum Industry Governance Bill on Wednesday, April 17, 2019, represents an opportunity for the Buhari administration to register its footprints on the positive side of Nigerian petroleum policy. The bill reflects changes and revisions Mr President demanded. PMB should therefore not hesitate to ensure that the Bill becomes law before the Eight Senate prorogues and the process must start willy nilly afresh.
The Petroleum Industry Governance Bill is one of the oldest bills in the Nigerian legislature. Its longevity in the cooking pot underscores part of the problem with the industry and with the understanding and management of the primary source of income for the Nigerian purse. President Umaru Yaradua introduced it first in 2008. The bill seeks to promote best practices in the management of the extraction of Nigeria’s oil. It has suffered delays, antagonism and nitpicking since then.
The Petroleum Industry Governance Bill (PIGB) is a critical bill with significance for the industry at the heart of the Nigerian economy. That it has taken 11 years to reach again to the semi-final of the race to make it law speaks to the seriousness or lack thereof with which the Nigerian political elite manage the economy. The concurrence of the House of Representatives and presidential assent must happen before May 28 when the present government and legislature ends.
It is critical that the House of Representatives concurs and that Mr President assents to this bill. It will be good optics for the administration. More importantly, it will be an essential stepping stone to laying a new foundation for the Nigerian petroleum industry.
The PIGB is only one part of a multi-faceted bill that seeks to redirect and structure activities in the petroleum sector. The Bill passed by the Senate has removed provisions for the Petroleum Equalisation Fund as demanded by Mr President. It also reduced the revenue accruing to the Petroleum Regulatory Commission from ten to five per cent, in agreement with Mr President. The presidential objections were sound. As the country moves towards deregulation, a price-fixing Petroleum Equalisation Fund is needless. Agencies that take so much from the purse are also not the way to go.
We extend commendations to the Senate which set up a Technical Committee on Declined Assent to Bills by Mr President, seven of them, and acted promptly on the recommendations. It is the way to go, except that it took about eight months to do the needful.
The delay in the management of this bill is bothersome. The pace has been slower than a snail. After the failure of the initial 2008 effort, it commenced life again in 2012 as the Petroleum Industry Bill. Specifically, it was “A bill for an act to provide for the establishment of a legal, fiscal and regulatory framework for the petroleum industry in Nigeria and other related matters.”
Some of its eleven objectives included creating a conducive business environment for petroleum operations, enhancing exploration and exploitation of petroleum resources for the benefit of the people and “establish a progressive fiscal framework that encourages further investment in the petroleum industry while optimising revenues accruing to the Government.”
It also sought to deregulate and liberalise the downstream petroleum sector, create efficient and effective regulatory agencies and promote transparency and openness in the administration of the petroleum resources in Nigeria.
The ambitious PIB was trimmed to the PIGB, tackling only one aspect of the many objectives of the original bill. The absence of legislation and policy direction has cost Nigeria dearly in the interim. Multinational and local players cannot make new investments without a compass. Some have moved their investments elsewhere.
Note that the President wrote to the Senate in August 2018 communicating his objections. It took another eight months for the Senate to revert with the changes and a draft Bill for assent. Before then, the president also took his jolly time to respond to the Senate, almost a full year as well.
Now is the time. We reiterate that the House of Representatives must act expeditiously to ensure that the PIGB gets to Mr President this April so he can sign off before the end of his first term. Nigeria’s best interest demands the goodwill of both parties in affirmative action on the PIGB.
