History as Senate, Reps pass harmonized PIGB

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The National Assembly on Wednesday passed the harmonised Petroleum Industry Governance Bill, PIGB, which is to regulate the nation’s petroleum sector, and stipulates a five per cent levy on petroleum products sold across the country.

The Senate had passed its version of the bill in July 2017 with the green chamber passing a slightly different version on January 17 this year. The two houses of the National Assembly subsequently set up a conference committee to harmonize the bills.

The approval of the harmonized bill in the Senate followed the presentation of the conference report for consideration by the chairman of the Senate Committee on Petroleum (Upstream), Senator Tayo Alasoadura.

The PIGB seeks to unbundle the Nigerian National Petroleum Corporation, NNPC, provide for the establishment of Federal Ministry of Petroleum Incorporated, Nigerian Petroleum Regulatory Commission, Nigerian Petroleum Assets Management Company and National Petroleum Company and Petroleum Equalisation Fund.

The regulatory bill also seeks to replace the NNPC with the National Petroleum Commission.

If it eventually becomes law, existing agencies, like the Petroleum Inspectorate, Department of Petroleum Resources, DPR, and the Petroleum Products Pricing Regulatory Agency, PPPRA, will be abolished.

Their functions will then be transferred to a new agency – the Nigeria Petroleum Regulatory Commission, NPREC, as provided in the new bill.

The bill empowers the commission ‘to administer and enforce policies, laws and regulations relating to all aspects of petroleum operations.

It also empowers it to monitor and enforce compliance with the terms and conditions of all leases, licences, permits and authorisations issued in respect of any petroleum operations.

It will also define and enforce approved standards for design, construction, fabrication, operation and maintenance for all plants, installations and facilities utilized or to be utilised in petroleum operations.

Similarly, it is empowered to establish, monitor, regulate and enforce health and safety measures relating to all aspects of petroleum operations; establish the framework for the validation and certification of national hydrocarbon reserves; advise the Minister on fiscal and other issues pertaining to the petroleum industry; undertake evaluation of national reserves and reservoir management studies.

It also empowers the body to issue licences, permits or authorisations for downstream gas, petroleum products, storage depots, retail outlets, transportation and distribution facilities for the industry.

According to Section 36 (1) (a) of the bill, “There shall be established the Petroleum Equalisation Fund into which shall be paid all monies payable to the Equalisation Fund by way of a five per cent fuel levy in respect of all fuel sold and distributed within the federation which shall be charged subject to the approval of the Minister (of Petroleum).”

In the approved bill, other sources of funding the Petroleum Equalisation Fund, include subventions, fees, and charges for services rendered as well as net surplus revenue recovered from petroleum products marketing companies, just as the Equalisation Fund shall collect all revenues and levies charged.

It will also determine the net surplus revenue recoverable from any oil marketing company and accruing to that company from the sale by it of petroleum products at such uniform prices as may be fixed by the Minister;  determine the amount of reimbursement due to any oil marketing company for purposes of equalisation of price of products among others.

The bill which also seeks to provide for the governance and institutional framework for the petroleum industry.

The bill also empowers NPREC to administer and enforce policies, laws, and regulations relating to all aspects of petroleum operation; monitor and enforce compliance with the terms and conditions of all leases, licenses, permits and authorisations issued in respect of any petroleum operations; define and enforce approved standards for design, construction, fabrication, operation and maintenance for all plants, installations and facilities utilized or to be utilised in petroleum operations; establish, monitor, regulate and enforce health and safety measures relating to all aspects of petroleum operations; establish the framework for the validation and certification of national hydrocarbon reserves; advise the Minister on fiscal and other issues pertaining to the petroleum industry; undertake evaluation of national reserves and reservoir management studies.

Speaking after the harmonization of the bill, the Senate President, Bukola Saraki urged President Muhammadu Buhari to sign the bill into law.

Saraki said, “I hope with this, we will get the assent of Mr President and hopefully open a new page for the petroleum industry”.

At the House of Representatives, there was a concurrence as the report of the conference committee on “A bill for an act to provide for the Governance and Institutional Framework for the Petroleum Industry (PIGB)” was considered and adopted by the Reps members.

The next step is the transmission of the bill to the President for assent and if signed into law, the NNPC will be unbundled into smaller independent companies thereby enabling it to start running like proper business units.

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