Why PIB Passage Is Delayed

The scheduled October 9, Senate public hearing on the Petroleum Industry Bill suffers another postponement because of extended independence anniversary celebrations and the hajj

By Anayo Ezugwu  |  Oct. 21, 2013 @ 01:00 GMT

THE hope of the seventh National Assembly passing the much-talked about Petroleum Industry Bill, PIB, is fast dwindling. The Bill on Monday, October 7, suffered another setback, as the Senate postponed the public hearing that was scheduled for October 9. The Senate said that the postponement became necessary because senators were still celebrating the nation’s 53rd independence anniversary.

Senator Emmanuel Paulker, chairman, Senate committee on petroleum, (Upstream), said the event had been postponed again because some of his colleagues were currently observing the hajjin Saudi Arabia. He ruled out insinuations from stakeholders and members of the public that the Senate was employing delay tactics to frustrate the passage of the bill. Rather, he said, the forced postponement of the public hearing was due to circumstances beyond their control.

According to him, national interest would prevail at the end of the day and that the PIB would be discussed and invariably passed by the National Assembly. “There is no cause for alarm. Everything humanly possible will be done to see the PIB through this time around. Contrary to insinuations, opposition against the Bill is only against some clauses in the Bill,” he said.

Alison-Madueke, minister of petroleum resources
Alison-Madueke, minister of petroleum resources

Paulker also said that international oil companies were opposing the fiscal regime of the Bill while some northern governors were opposed to the 10 percent equity participation of the host communities. He, however, said the stakeholders in the oil and gas industry had agreed that the laws regulating the sector were obsolete and needed to be reviewed. “The PIB has no problem. Our first outing of the public hearing slated for two days in May this year, was inconclusive because we lost a colleague on the second day of the two-day event. We had a full session on the first day of the hearing but the second day was the burial of Senator Pius Ewherido. I cannot sit in the Senate for a public hearing when a colleague was being buried.”

Commenting on the controversies trailing the bill, Paulker said that the PIB was important to every Nigerian and to all the sectors of the economy. “Oil is the mainstay of our economy. We are looking forward to a day that the economy would be diversified. There is so much reliance on oil. As long as the economy rests on oil and there is an Act that is coming to repeal all laws surrounding this single all-important commodity, every serious- minded Nigerian would be interested. I have continued to receive calls from my colleagues and other stakeholders that if we hold the public hearing on October 9, it will not be possible for them to participate in the exercise. One thing I will assure Nigerians is that everything humanly possible will be done to ensure that the PIB will see the light of the day. As soon as we have this last outing of the public hearing, we will retreat to our committee level. We can decide to lock up ourselves for a week or two to filter the bill so that we can forward it to the plenary.”

The controversies and continuous postponement of the Bill by the National Assembly has indicated that those who are determined on killing the Bill are having their way. Since the bill made its debut in the National Assembly in 2008, some federal legislators from the north and other stakeholders from the zone had opposed it from the onset over the proposal to set aside 10 percent of profits from petroleum operators for the welfare of host communities to be known as petroleum host community fund, PHCF. They also opposed the powers which the Bill confers on the president and the minister of petroleum resources.

Aside from the staunch opposition from the north, the oil majors under the auspices of the Oil Producers Trade Section, OPTS, also opposed the passage of the Bill, saying that the proposed increase in royalties and taxes would make Nigeria’s fiscal regime one of the harshest in the world. They also threatened to leave the shores of the country if the national Assembly passes the Bill.

But David Mark, Senate president, said in August this year that the Bill would be passed by the National Assembly very soon. He said that the situation of things in this regard was making Nigeria to be at the losing end while the international community was the one gaining due to its influence in governance. “The advantages of the Bill are greater than the disadvantages, and this is the reason why Nigerians should see the need to have a bill that will make investors come in to set up refineries, encourage competition in the sector, which in the main, will regulate the price of petroleum products and create jobs for the unemployed,” he said.

According to him, the Bill was conceived to repeal the Petroleum Act of 1969, and consolidate about 16 other petroleum industry laws into a transparent and coherent document. He added that the objectives was to establish a comprehensive legal and regulatory framework for good governance, transparency and accountability, with regard to operational and fiscal terms for revenue management, and removal of confidentiality clauses in licences, leases, and contracts in the nation’s petroleum industry.

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