11 February 2018, Sweetcrude, Abuja — The Nigeria Extractive Industries Transparency Initiative, NEITI, has faulted certain provisions in the recently passed Petroleum Industries Governance, PIGB, calling for the scrapping of the Petroleum Equalisation Fund (PEF).
NEITI, in its 2015 Audit Report for the Petroleum Industry, released recently, disclosed that its review of the Bill showed that the Petroleum Equalization Fund was provided for but the management of the Fund was not adequately discussed.
In its recommendations, NEITI stated that the management of the Petroleum Equalization Fund should be given to the private sector as was done with the pension fund.
It also faulted the section of the Bill which gave the responsibility of regulating both the upstream and downstream sectors of the petroleum industry to a single entity, the Nigeria Petroleum Regulatory Commission.
According to NEITI, there should be separate regulatory authorities for the upstream and downstream sectors, as it is done in Ghana.
Furthermore, NEITI observed that the issue of Health, Safety, and Environment was conspicuously missing from the PIGB, warning that the passage of the bill without taking into considerations these salient issues would result to future agitations in the Niger Delta.
“Before the Bill is finally passed into law, the issues of the environment should be adequately addressed in view of recent happenings in Niger Delta and other oil-producing areas,” NEITI stated.
However, NEITI had commended both chambers of the National Assembly for the passage of the PIGB, stating that the Bill would stem the massive loss of revenue recorded in the petroleum industry, arising from corrupt practices and process lapses.
NEITI had in a statement to newsmen, disclosed that over $10.4 billion and N378.7 billion were lost through under-remittances, inefficiencies, theft or absence of a clear governance framework for the oil and gas industry.
According to NEITI, the total cost to the nation in 2013 alone was N1.74 trillion largely as a result of the absence of a new law.
NEITI had further noted that the implementation of the global Extractive Industries Transparency Initiative, which Nigeria is a key signatory, had over the years been frustrated by the absence of a dynamic law that suits modern business modules and trends in the ever-evolving oil and gas industry.
It averred that it remained convinced that the PIGB when assented to by the President, would provide a dynamic governance framework required to re-position the petroleum industry to fully embrace competition, openness, accountability, professionalism and better profit returns on investments to both companies and government.
It said, “NEITI is optimistic that with the new governance law for the industry, these huge revenue losses to the nation as a result of process lapses and outright stealing will be strictly checked if not eliminated.”
NEITI noted that the decision of the Senate and the House of Representatives to consider the Bill as priority resulting in its eventual passage is bold, courageous and progressive, especially given the challenges the bill had passed through in its legislative journey for over ten years.
NEITI said its interest in the issue, was in view of the urgency and strategic importance of a new law to replace the existing archaic legislation that have aided huge revenue losses, impeded transparency, accountability and investment opportunities in the nation’s oil and gas industry.”