The Petroleum Industry Bill (PIB) has been signed by President Buhari according to national news.
Sponsor: i don’t known yet
Legislative Chambers: House of Reps and the Senate
Year of Sponsorship:2020
You can also track the timeline of the Petroleum Industry Bill
Petroleum Industry Bill Meaning in Nigeria
The Petroleum Industry Bill (PIB) is meant to restructure Nigeria’s petroleum industry by touchimg on the legal, exploration and business aspects to provide for a better framework for Nigeria’s petroleum industry which has the mainstay of the Nigerian economy since 1971.
Petroleum Industry Bill Analysis
So, the effects and benefits of the Petroleum Industry Bill 2021 as I made analysis from Tonbofa’s summary of Petroleum Industry Bill are as follows
#1 Nigeria National Petroleum Corporation Incorporation
The Nigerian National Petroleum Corporation will be turned to a public liability company ” NNPC Limited” from a public corporation ,”NNPC”: This will mean that it will have shares which for the time being will be owned by the Federal Ministry of Finance.
Dereguralising and commercialising the Nigeria petroleum regulatory body will likely allow for level playing field and reduced government corruption in the parastatal, so Nigerians will have more money in the supply and not in the pockets and agbadas of pen-robbers.
#2 Low Returns to The Niger-Delta oil-producing states
The Niger-Delta oil producing states of Ondo, Edo,Delta,Bayelsa,Rivers,Akwa Ibom, CrossRiver, Abia and IMO will be entitled to 3 per cent derivative principle of the revenue earned from each place.
This may continue the Niger-Delta agitation for oil-justice which we know as Niger-Delta Militancy. More so, secession. We can only hope Niger-Delta militants will not grow weary and begin to blow up pipelines in their quest to get the Government’s attention and in their request for oil-justice.
#3 Petroleum Industry Lincenses, Taxation and Penalties
The PIB is bringing some taxes for oil companies such as hydrocarbon tax. Company income tax of petroleum companies will be as high as 30 per cent.
PIB’s penalties include gas flaring. Also, oil dealers must have petroleum exploration license, petroleum prospecting license and oil mining lease.
This will certainly increase the revenue of the Government—— the commonwealth of the people and may help reduce the price of petroleum products as Government should have no excuse for petrol price hikes—–a benefit of the petroleum industry bill.
#4 Oil Host Communities Development Plan
Yes, the Petroleum Industry Bill 2021 will ensure that the will be paid to the Niger-Delta oil-producing community concerned and that the fund will be tax-free and can only be used for specific development programs by the host communities.
This is okay, basically, but restructuring the petroleum sector is only one part of restructuring Nigeria.
#5 Establishment of Two Extra Regulatory Commissions
The Petroleum Industry Bill will also establish the Nigerian Upstream Petroleum Regulatory Commission and the Nigerian Midstream and Downstream Regulatory Commission.
This may allow for more efficiency and less public corruption in having two regulatory commissions in the petroleum sector.
The Petroleum Industry Bill is a welcome development but it has inadequacies just as it has benefits.
I would wish to recommend a policy i drafted on how to end petrol price hikes in Nigeria to be part of the reforms for the petroleum sector.