Demystifying the Petroleum Industry Bill (PIB)

What You Need to Know About Fuel Subsidy
March 21, 2018
April 6, 2018

You may ask why the Petroleum Industry Bill (PIB) has been generating a lot of discourse and debate for eons in Nigeria. This is so because the oil industry which the bill proposes to overhaul is Nigeria’s economic mainstay which implies that any change in the industry is bound to affect Nigeria’s economy entirely.

The PIB which has its long title as, “an act to establish the legal and regulatory framework, institutions and regulatory authorities for the Nigerian petroleum industry, to establish guidelines for the operation of the upstream and downstream sectors, and for purposes connected with the same” seeks to realign Nigeria’s oil industry in line with sustainable best practices. The bill touches on local content, environmental development, host community engagement, licensing, transparency and accountability, taxation and other salient issues as they affect Nigeria’s oil and gas industry.

The process which birthed the bill commenced during the administration of former President Olusegun Obasanjo with the formation of the Oil and Gas Implementation Committee (OGIC). The policy paper and report submitted by the OGIC was what transmogrified into the Petroleum Industry Bill (PIB) in 2008 during late Umaru Musa Yar’adua’s administration.

The bill which failed to pass during the 6th National Assembly had to be reviewed and finalised after the January 2012 subsidy removal uproar. The different versions of the Bill were finally harmonised and consolidated by a technical committee under the leadership of Mr. Osten Olorunsola and the final copy has 223 pages, 9 parts, 362 sections and 5 schedules covering the entire spectrum of the upstream and downstream sector of the industry.

Amongst other things, the core objectives of the bill are as follows:

  • Creation of a conducive business environment for petroleum operations;
  • Establishment of a progressive fiscal framework that encourages further investment in the petroleum industry while optimising revenues accruing to government;
  • Creation of efficient and effective regulatory agencies;
  • Promotion of transparency and openness in the administration of the petroleum resources of Nigeria.

Since late 2017 when a part of the PIB – the Petroleum Industry Governance Bill (PIGB) – was passed by the National Assembly, calls have been mounting for President Buhari and the National Assembly to expedite actions on other sections of the bill such as the Host Community Bill which is also part of the original PIB.

Despite the progress made on the PIB, it is disheartening to know that Nigeria’s oil and gas industry is still largely inefficient with many of the activities therein shrouded in mysterious secrecy. However, CSR-in-Action in partnership with other well meaning Nigerian and international organisations are set to confront the hydra-headed monster driving back Nigeria’s oil industry through an annual extractive industry conference; Sustainability in the Extractive Industries (SITEI).

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