By Jeph Ajobaju, Chief Copy Editor
A committee of six members has been constituted by the 36 states to study the Petroleum Industry Act (PIA) and recommend amendments to assuage grievances North and South, a major one of which is the exclusion of states from oil affairs.
Forum of Commissioners of Finance (FCF) Chairman and Benue State Commissioner for Finance, David Olofu, said the forum would submit amendments to the PIA Steering Committee set up by President Muhammadu Buhari.
Buhari signed the PIA on August 16 and it has since attracted criticism from stakeholders and Governors as well as oil communities which want a 5 per cent cut from profits, not the 3 per cent in the PIA.
The Nigeria Governors’ Forum (NGF) insist the law is against the interest of states.
Depletion of Federation Account
NGF Chairman and Ekiti State Governor, Kayode Fayemi, expressed concern on August 19 over 30 per cent allocation for frontier exploration in the PIA and the 3 per cent for host communities.
“We worry more about the entire federation and not about selected parts of the federation. For us as Governors, that is a distinction without a difference.
“We are talking about depletion of the Federation Account, whether it is 3 per cent or 30 per cent,” Fayemi told The PUNCH.
Olofu confirmed to the newspaper that the review panel, headed by Delta State Finance Commissioner Fidelis Tilije, was set up by the FCF which met after the meeting of the Federal Account Allocation Committee (FAAC) on August 20.
Other members of the committee are states’ Finance Commissioners Bola Oyebamiji (Osun), Doris Anite (Imo), Regina Boniface (Plateau), Lawan Adamu (Borno), and Babangida Umar (Jigawa) who serves as the secretary.
According to Olofu, the committee members were picked from every zone to look into areas in the PIA which do not take the interest of states into consideration.
He said the committee would make recommendations that would be submitted to the Implementation Committee for possible amendment of the Act.
Olofu stressed that “the law is to regulate the system. I like to say that the law is not perfect, but it is a good starting point.
“We have observed certain provisions and lack of provisions for the sub-national sector in the law and because of the observation, we tackled the matter at the FAAC, which was chaired by the minister in a representative capacity, and we have been assured that the concerns would be taken on board.
“And based on the timeline of 12 months provided, the implementation committee should be able to work out an amendment to the Act.
“So, the Forum of Commissioners of Finance has also set up a committee on the Petroleum Industry Act to be chaired by the Commissioner for Finance, Delta State, to look into all the grey areas and make recommendations that will now be forwarded to the implementation committee for possible amendment of the Act.”
Olofu said the Implementation Committee will thorough job and it is important that Governors are members.
“It is very important at the level of the Governors’ Forum that some of them are members of the committee, either to chair it or have members representing the geopolitical zones because the Nigerian National Petroleum Corporation [NNPC] is a federal asset and you cannot transmute to a company without carrying along with the federating units.”
Host communities’ fund payment begins August 2022
PIA implementation timelines seen by The PUNCH show that
· The nomination of board members for NNPC Limited, the new firm replacing the NNPC, will be held in May 2022.
· The payment of 3 per cent allocation for the host communities begins in August 2022.
· The “creation of committees and nomination of board members” of the new NNPC will take effect in nine months’ time.
The document also confirms the recent announcement by the Minister of State for Petroleum Resources, Timipre Sylva, that the NNPC will be incorporated as a limited liability company in February 2022.
The PIA says “the minister shall within six months from the commencement of the Act, cause to be incorporated under the Companies and Allied Matters Act, a limited liability company, which shall be called the Nigerian National Petroleum Company Limited.”
The timelines took cognisance of the fact that the Petroleum Industry Bill (PIB) was passed by both chambers of the National Assembly (NASS) on July 15 and 16 and Buhari signed on August 16.
The target is to have the Act implemented between 2021 and 2023, as the document also recognised that the presidential elections hold on February 18, 2023.
Two days after signing the PIA, Buhari announced the constitution of an Implementation Committee of nine members, chaired by Sylva, who disclosed that the team would ensure full implementation.
Sylva explained last week that the role of the committee is “to guide the effective and timely implementation of the law in the course of transition to the new petroleum industry envisaged in the reform programme.
“To ensure that the new institutions created have the full capability to deliver on their mandates under the new legislation.
“To approve the road map for implementation, which will be presented by the Implementation Working Group/Coordinating Secretariat, among others.”
The timelines also show
November 2021
Establishment of domestic gas base price.
August 2022
Implementation of the Host Communities’ Development Trust Fund.
August 2022
Licencees to submit gas flare elimination and monetisation plans.
February 2023
Conversion of Oil Mining Licences and marginal fields to PIA terms.
August 2023
Confirmation or modification of all midstream and downstream tariffs.
There are no specific dates for the establishment of the Upstream Petroleum Regulatory Commission and Midstream and Downstream Regulatory Authority.