Reported by the Newspapers yesterday (here and here) is the commencement of the much anticipated second reading of the Petroleum Industry Bill (PIB) by the Senate on Tuesday, March 5, 2013 following a failed attempt to commence deliberations in December 2012.
Initiating the debate, Senate leader, Senator Victor Ndoma-Egba stated that the PIB was one of the most significant pieces of legislation to be considered by the Senate, whilst lauding the various benefits to be derived from the passage of the Bill which he stated included increased domestic gas supply for the power industry, a flexible and stable fiscal framework that is competitively attractive, the creation of a two-tier royalty and tax regime which captures the upside of crude oil and gas prices and the creation of a more commercially viable national oil company through the corporate restructuring of the Nigerian National Petroleum Corporation (NNPC) amongst others.
The crux of the Bill’s second reading centered around three contentious issues:
- The 10% remittance of profits from petroleum operators to host communities in form of the Petroleum Host Community Fund (PHCF);
- The inadequacy of the Petroleum Technical Bureau; and
- The excessive powers of the Minister.
Senators Abdukadir Jajere (Yobe South) and Ali Ndume (Borno South) led by Senator Ahmed Lawan (Yobe North) opposed the 10% remittance provision in the bill for the Host Community Fund. Senator Lawan stated that oil producing states had over the past decade received revenue adding up to 11 trillion Naira from the 13 per cent derivation fund; the Niger Delta Development Commission (NDDC); the Ministry of Niger Delta, the Amnesty Programme; and the Special Presidential Initiative Fund but had little or nothing to show for it as its leaders had mismanaged these funds thus failing to carry out significant development in the region.
It was further argued that the Petroleum Technical Bureau should be an independent organisation detached from the Ministry of Petroleum Resources which must concern itself with developing frontier acreages and should not be mixed with the abolishment of the Petroleum Equalistaion Fund.
Jajere further pointed out that the PIB provides the Minister of Petroleum Resources with excessive power, noting that if the bill is passed in its current form, the Minister would become too “powerful and uncontrollable”.
Senator Bukola Saraki (Kwara Central) in his own contribution called for caution as he believed the Senate was spending too much time arguing on the 10% PHCF derivation. He insisted that there was need to address issues of transparency in the Bill as its lack thereof has bedevilled the Nigerian petroleum industry.
Senators Isa Galaudu (Kebbi North) and Ibrahim Gobir (Sokoto East) on the other hand, opposed the bill in totality, saying it should not be passed at all.
Senators Ifeanyi Okowa (Delta North) and Benedict Eyade (Cross River North) urged their colleagues to rise above emotions and sentiments so that the bill could pass the second reading. Okowa said that it was important to realise that Bills emanating from the Executive may have its flaws but what is most crucial is the Executive’s good intentions.
The Senators’ differing stances we believe to a great extent provide a glimpse into what cross sections of Nigerians think on these issues and it would be interesting to see the outcome of the debate.