The 36 states of the federation have set up a six-man committee on the Petroleum Industry Act with a mandate to study and draw up amendments to the law.
The Chairman of Forum of Commissioners of Finance and Benue State Commissioner for Finance, David Olofu, who disclosed this in an interview with one of our correspondents on Monday, stated that the forum would submit proposed amendments to the Act to the steering committee on the PIA set up by the President, Major General Muhammadu Buhari (retd.).
Recall that the Petroleum Industry Bill, which was signed into law by the President last week, has attracted criticisms from some stakeholders, especially state governors and the oil-bearing communities.
While the host communities faulted the three per cent allocated to them, the Nigeria Governors’ Forum stated that the law was against the interest of the states.
The NGF Chairman and Ekiti State Governor, Dr Kayode Fayemi, had in an interview last Thursday expressed concern over 30 per cent allocation for frontier exploration and the three per cent for the host communities in the PIA.
He said both provisions, if implemented, would deplete the Federation Account, adding, “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 three per cent or 30 per cent.” he explained.
Olofu, who had on Wednesday told The PUNCH that state governments would discuss the PIA at the Federation Accounts Allocation Committee meeting, on Monday confirmed that a six-man committee headed by the Delta State Commissioner for Finance, Fidelis Tilije, was set up by the forum of finance commissioners, which met after the FAAC meeting on Friday.
According to him, other members of the committee are the Osun State Commissioner for Finance, Bola Oyebamiji; his Imo State counterpart, Dr Doris Anite; Dr Regina Boniface (Plateau State); Lawan Adamu (Borno State); while Babangida Umar (Jigawa State), would serve as the secretary.
Olofu, who stated that the committee members were picked from every geopolitical zone of the country, disclosed that the panel would look into the grey areas in the Act.
He said the forum agreed that there were grey areas in the PIA, which did not take into consideration the interest of the states.
The forum chairman said that the committee would make recommendations, which would be submitted to the implementation committee, for possible amendment of the Act.
Olofu stated, “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, who expressed optimism that the implementation committee would do a thorough job at the end of the day, said it was important that governors were members of the implementation committee.
When asked if they recommended that governors should be members of the implementation committee, the Benue finance commissioner said, “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 is a federal asset and you cannot transmute to a company without carrying along the federating units.”
Meanwhile, the nomination of board members for the Nigerian National Petroleum Company Limited, the new firm that the NNPC is to be transformed into, will be held in May next year, it was learnt on Monday.
Also, the payment of the three per cent allocation for the host communities will begin in August.
According to the implementation timelines of the PIA sighted by one of our correspondents in Abuja, the “creation of committees and nomination of board members” of the new NNPC will take effect in nine months’ time.
The implementation timelines also confirmed the recent announcement by the Minister of State for Petroleum Resources, Chief Timipre Sylva, that the current NNPC would be incorporated as a limited liability company in February 2022.
The PIA had also stated that “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.”
Further analyses of the implementation timelines showed that the document took cognisance of the fact that the PIB was passed by both chambers of the National Assembly on July 15 and 16, 2021, and was signed into law by the President on August 16, 2021.
The implementation timelines also showed that the target was to have the Act implemented between 2021 and 2023, as the document also recognised that the presidential elections would hold on February 18, 2023.
After signing the PIB into law on August 16, 2021, Buhari announced the constitution of an implementation committee chaired by Sylva, who disclosed that his nine-man team would ensure the adequate implementation of the PIA.
Outlining the terms of reference of the committee in Abuja last week, Sylva said it was “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 stated that the conversion of Oil Mining Licences and marginal fields to the PIA terms would be in February 2023, adding that the implementation of the host communities’ development trust fund would be in August 2022.
On the regulatory authority targets, it stated that the establishment of domestic gas base price would be in November 2021.
In August 2022, licensees are to submit gas flare elimination and monetisation plans, while the confirmation or modification of all midstream and downstream tariffs would be held in August 2023.
The implementation timelines, however, did not put a specific timeframe for the establishment of the Upstream Petroleum Regulatory Commission and Midstream and Downstream Regulatory Authority.
Sylva could not be reached on Monday, as it was gathered that the minister was on a brief leave.
(Punch)
