• Saturday, July 13, 2024
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BusinessDay

The presumptuous PIB

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Ordinarily, the Petroleum Industry Bill (PIB) currently before the National Assembly ought to be one of the boldest pieces of legislation in the sector’s history, but its presumptuous nature appears to make nonsense of the effort. Why we strongly believe that the nation’s oil and gas sector needs a guide book, we do not think the PIB document in its present form will meet that need.

As the petroleum resources minister rightly stated recently, the PIB aims at introducing new tax and royalty regime to increase the government’s take and redistribute more of the earnings to ordinary Nigerians. According to her, it seeks to “rationalise what is a notoriously cumbersome legal framework and to clarify the fiscal terms on which a foreign player can acquire concessions from and partner with the Nigerian National Petroleum Corporation (NNPC), the state-owned corporation that controls large stakes in the country’s major operations”.

Among other expected benefits of the bill is to put an expanded share of production into the hands of domestic firms and improve the credibility of the NNPC, making it a commercially viable, profit-driven entity with greater independence from the government.

While we concur with these laudable objectives, we, nonetheless, condemn, in line with other Nigerians, the sweeping powers which the bill in its present form confers on the minister of petroleum resources. For instance, the bill empowers the minister to coordinate and supervise all activities in the petroleum industry, including powers to grant, amend, renew, extend or revoke upstream and downstream petroleum licences and leases. The draft stipulates that the minister only needs the president’s approval to carry out the above listed functions.

It is our belief that if the bill is allowed to sail in its current form, an individual may be tempted to run the sector as his/her fiefdom. The consequences of such brazenness may be too telling on the country. Our take is that all stakeholders must bury self-interest and concede a measure of grounds to ensure that a workable document is arrived at. If, for instance, the International Oil Companies (IOCs) fail to do so and continue to delay the passage of the PIB Act to strengthen the legal framework for their operation in Nigeria, it will affect their activities.

Government must borrow a leaf from countries that had a similar challenge – how they reviewed the fiscal regimes that govern their oil industry. Local players in the oil and gas sector should allow for new fiscal policies. The temptation is to resist change by pushing that the old order should continue, forgetting that it is the faulty policies that put the country at a disadvantaged position.

We are sad that the sector is no longer attracting new investments in the oil and gas industry and no exploration is going on. These are dangerous signs that should jolt policymakers into taking urgent action to save Nigeria from an impending doom.

If this ugly state of affairs persists, it may even affect budget implementation which may ultimately have negative consequences on the masses of this country. But we must insist that it is better not to have a PIB than to have one that can destroy not only the industry, but the country as a whole.