Nigeria loses about $200 billion investments because it has failed to reform its oil and gas sector, according to Nigeria Extractive Industries Transparency Initiative, NEITI

By Anayo Ezugwu

THE Nigeria Extractive Industries Transparency Initiative, NEITI, has urged the federal government to reform the country’s oil and gas industry to attract investors. NEITI reiterated that the slow pace of reform in the sector would continue to deny the country potential benefits and investments that could have come to the country.

It warned that global oil and gas investors could not afford to continue to wait for the country to reform her oil industry. According to NEITI, it has taken the country too long to overhaul the law enacted in 1969 with new ones that are in line with modern realities in the industry. This has resulted in the country losing close to $200 billion worth of investments that could have come to the country if it had new laws to guide operations in the oil industry.

Waziri Adio, executive secretary, NEITI, stated this at a recent symposium it organised on the Petroleum Industry Governance Bill, PIGB, which the National Assembly passed on Wednesday, March 28.

Adio noted that while the oil industry still contributes up to 60 percent of the revenues of Nigeria’s governments and more than 80 percent of the country’s export earnings, issues around its reforms for efficiency have been taken with levity by the political class of the country.

“The value of deliberating about and triggering necessary actions on, the legal and institutional frameworks for adequate optimisation of our oil and gas sector cannot be over-emphasised. Despite that oil prices are still not back in the $100 plus per barrel territory and despite that the best days of hydrocarbons are possibly behind us, the petroleum sector as at last year still accounted for almost 60 percent of government revenues and more than 80 percent of our export earnings.

“And given the disproportionate impact of government revenues and export earnings on our economy, it will not be far-fetched to insist that this sector remains the backbone of not just our economy but also of national life.  For many reasons, governing and running this strategic sector in a more transparent, more accountable, more equitable, more efficient, and more optimal manner in our collective interest.”

According to him, it is difficult to have a national consensus on many things in Nigeria, but there seems to be one on the oil and gas sector, and that is that the status quo is sub-optimal, despite our more than 60 years of experience as an oil-and-gas country. That is why the search for better management and governance of the sector has assumed the salience that it does.

“But it has turned out to be a long search, as we have wandered about as if nothing were at stake and as if the world would always wait for us. But there are serious costs, and the world has not waited, and will not wait, for us. Time is running out on us.

“Our oil and gas reserves will run out, and oil will soon run out of fashion based on what is happening around alternative energy and electric cars. We have wasted so much time, at enormous costs. Time is a luxury we don’t have again. The last best time to act was yesterday. The next is now.”

The Senate had on Wednesday, passed the harmonised version of the Petroleum Industry Governance Bill. The passage followed the adoption of the report by the Conference Committee on the PIGB, which harmonised the versions earlier passed by the Senate and House of Representatives.

The harmonised version of the bill seeks to unbundle the Nigerian National Petroleum Corporation and merge its subsidiaries such as the Department of Petroleum Resources and the Petroleum Products Pricing Regulatory Agency into one entity.

The proposed law seeks to establish the Petroleum Equalisation Fund “into which shall be paid all monies payable to the Equalisation Fund,” including a five per cent fuel levy “in respect of all fuel sold and distributed within the federation, which shall be charged subject to the approval of the minister (of Petroleum Resources).”

The bill, however, did not state who would pay the levy among the federal government, importers and marketers, and consumers. It also did not state the level at which the levy would be paid, whether during exploration, importation or at the retail pump level. It was not stated if the levy would be charged per barrel of oil or per litre of fuel.

– Mar. 31, 2018 @ 4:15 GMT |