PIB Passage Demands Urgency | Independent Newspapers Limited
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PIB Passage Demands Urgency

Posted: May 19, 2016 at 2:00 am   /   by   /   comments (0)

The recent removal of subsidy on the Premium Motor Spirit (PMS), otherwise known as Petrol, by the Federal Government, suggesting the complete liberalisation of the petroleum downstream sector, has brought the issue of the Petroleum Industry Bill (PIB) back into focus. This implies that the petroleum industry will now need a more efficient and all encompassing regulatory and management framework to streamline operations in the sector.

To be sure, the subject of the PIB began in 2007 as a result of the recommendations of the Oil and Gas Implementation Committee (OGIC), set up by former President Olusegun Obasanjo, in April 2000, to carry out comprehensive oil and gas sector reforms in the country. Unfortunately, the promising yet problematic bill, which was expected to be the major driving force to Nigeria’s vision 2020, has been left in the shelf of the National Assembly (NASS) to gather dust.

Nevertheless, the importance and relevance of the PIB cannot be overemphasised even as a lot has been said and written about its continuous abandonment. With the latest development in the sector, it has become absolutely imperative now, more than ever, to fast-track the process of passing the bill. The urgency of the matter lies in the fact that the oil sector has depended on obsolete and completely irrelevant Petroleum Act of 1968 for the administration and regulation of one of the most dynamic and critical sectors of the economy – the oil and gas industry. As a result, some of the challenges in the oil industry – gas flaring, environmental degradation, crude oil theft and pipeline vandalism; divestment of International Oil Companies (IOCs): local content, human capital deficit and a host of others seem not to be fully addressed.

It is, however, heartwarming that recently a revised version of the said bill has reportedly passed through the first reading at the floor of the two Chambers of the National Assembly (NASS). The new version of the bill, which has been re-captioned “Petroleum Industry Governance Bill (PIGB), like the botched version, seeks to effectively remove all the legal and regulatory bottlenecks that hitherto restricted effective administration of the industry.

Instructively, some of the objectives of the bill are to create efficient and effective governing institutions with clear and separate mandates for the petroleum industry, establish a framework for the creation of commercially oriented and profit-driven petroleum entities that would add value in line with international best practices. In addition, the bill seeks to promote transparency and accountability in the administration of the petroleum resources, so as to foster a conducive business environment for operations in the industry. Suffice it to say that the bill is robust and comprehensive, as it brings the industry up to speed with what obtains globally.

However, now that the country is moving towards complete deregulation of the oil downstream sector, there is an urgent need to expedite action on the passage of this all-important bill. It is our hope that the bill will not suffer further delay. It is noteworthy that the various setbacks the bill had suffered before now are due to diverse interests scrutinising its provisions. It is crucial at this point that all the hitches, interests and political logjams that have held the passage of the PIB or the PIGB as it is presently titled for so long be laid to rest in the interest of the advancement of the industry in particular and the Nigerian economy in general. Certainly, there is no other better time for the swift passage of the bill than now, considering that it is in tandem with the idea of the deregulation policy of the sector whose implementation has commenced, following the recent removal of the subsidy on PMS.

We believe that passage of the bill would calm frayed nerves and assuage the fears of oil-bearing communities as well as secure prized national assets such as oil pipelines. Among the factors that could result in Moody’s potential rating downgrade are deterioration in the domestic or regional political environment and disruptions to oil production and foreign investments such as is now being witnessed, especially in the Niger Delta area of the country. Although government maintains its preparation to prosecute vandals, the country can ill afford the increasing spate of militancy and pipeline vandalism in the region. This informs our position.