Business - Business & Economy - News - Oil & Gas - August 24, 2021

States pick holes in new Petroleum industry law; constitute committee to propose amendments

MEDIATRACNET

The 36 states of the federation have identified pitfalls in the new Petroleum Industry Act (PIA) that was assented to by President Muhammadu Buhari last week.
Apart from the three percent of the oil companies’ operating surplus approved for the Host Community Trust Fund in the new Act, the Nigeria Governors’ Forum said the principles and provisions of the law was against the collective interest of the states.
The PIA, the states noted, violated both the principle of separation of power as enshrined in the provisions. Of Section 162 of the 1999 Constitution, and concept of separation of power among the three tiers of government.
The Chairman of the Nigerian Governors’ Forum and Ekiti State Governor, Kayode Fayemi, in reaction to the new law last said the governors were concerned with the approval of over 30 percent allocation for frontier exploration against the three percent approved for the development of the host oil producing communities.
Fayemi said both provisions, if implemented, would deplete the Federation Account.
Prior to the meeting of the Federation Accounts Allocation Committee (FAAC) on Friday, the Commissioners of Finance and Accountants General of the States hinted the would considering approaching the courts to seek clarifications to aspects of the new they considered a violation of the constitution.
But at the end of the meeting the Chairman of Forum of Commissioners of Finance, David Olofu, said a committee was constituted charged with the responsibility of studying the provisions of the PIA and drawing up they think would require amendments.
Olufu, who is also the Benue State Commissioner for Finance, said the committee would submit the proposed amendments to the Act to the steering committee on the PIA constituted last Wednesday by the President.
The six-member committee is headed by the Delta State Commissioner for Finance, Fidelis Tilije, with other members including his counterparts from Osun (Bola Oyebamiji); Imo State (Doris Anite); Plateau (Regina Boniface), and Borno (Lawan Adamu), while Babangida Umar of Jigawa State would serve as the secretary.
Olofu said members of the committee were drawn from all the six geopolitical zones of the country, adding that the committee is expected to review the grey areas in the Act, which did not accommodate the interest of the states.
At the end of its assignment, the forum chairman said the committee would make recommendations to be submitted to the implementation committee, for possible amendment of the Act.
“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 of Finance and National Planning in a representative capacity, and we have been assured that the concerns would be taken on board,” Olufu said.
Based on the timeline of 12 months provided by the President for the implementation committee headed by the Minister of State for Petroleum Resources, Timipre Sylva, Olufu said the government should be able to work out an amendment to the Act to assuage the concerns of the states and the oil producing host communities.

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