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Subsidy removal is diversionary – TUC

TRADE Union Congress of Nigeria, TUC, accused President Goodluck Jonathan, of using the controversial planned removal of fuel subsidy in January, to divert Nigerians’ attention from the government’s inability to see through the passage of protracted Petroleum Industry Bill, PIB.

This, the union noted is because downstream deregulation is already an integral part of the PIB. “The loss to the Nigerian economy as a result of the delay in the passage of the PIB is colossal and far more than the amount spent on fuel subsidy.

Besides, if the transparency clauses in the PIB are properly articulated there would be drastic reduction in the corruption in the Nigerian oil and gas sector including those associated with the oil subsidy management. In addition, the PIB provides a rare opportunity for the government to undertake a holistic review of the downstream sector including how to grow our local refining capacity and as well as attract serious investments into that sector.

The non passage of the PIB is stalling huge investments in the Nigerian oil and gas industry, as prospective investors are not sure of the fiscal regimes and other rules that will govern their investments and the Nigerian oil and gas industry.”

TUC advised the president to focus his energy on harmonising the various versions of the PIB in circulation, and forward an Executive Bill on the PIB to the National Assembly, which should also be made available to the public to guide further debates in the National Assembly.

This was contained in a paper titled: “The Petroleum Industry Bill and the Challenges of Transparency in the Oil and Gas Industry,” delivered at the 2011 NUPENG annual training workshop on Transformational Agenda And Processes in the Oil and Gas Industry: Issues for Trade Union leaders’ consideration, in Calabar, Cross River State.

The Chairman of Rivers State Council of TUC, Comrade Hyginus Chika Onuegbu, recalled that the PIB, which is based on the report of the Oil and Gas Reform Implementation Committee, OGIC, set up by the Federal Government in year 2000, to carry out a comprehensive reform of the oil and gas industry, was first presented to the National Assembly in September 2008.

According to him, “the PIB combines 16 different Nigerian petroleum laws into a single and coherent document to provide for the establishment of the legal and regulatory framework, institutions and regulatory authorities for the Nigerian petroleum industry as well as establish guidelines for the operation of the upstream and downstream sectors.

Some of the laws that would be affected by the PIB include; The Petroleum Profit Tax Act 1959, The Petroleum Act 1969, The Petroleum Technology Development Act 1973, The Associated Gas Re-injection Act 1979, The Petroleum Equalisation Fund Act 1989, The Oil Pipelines Act 1990, The Nigerian National Petroleum Corporation Act 1997; and The Petroleum Products Pricing Regulatory Agency Act 2003.

“The PIB is therefore, a reform legislation that seeks to holistically review the oil and gas industry. It is however, unfortunate that the 6th National Assembly could not pass the PIB into law even after concluding a very elaborate public hearing and after several promises to Nigerians that they will do so.

When the 7th National Assembly was inaugurated in June 2011, the general public including stakeholders in the Nigerian oil and gas industry were quick to draw their attention to the urgent need to fast-track the passage of the PIB into law. It is therefore not a surprise that new Petroleum Industry Bills are now before each chamber of the National Assembly.”

The PIB has the following fundamental objectives.

Enhance exploration and exploitation of petroleum resources in Nigeria and to promote petroleum production for the benefit of all Nigerians

Significantly increase domestic gas supplies for power generation and industrial development

Create a peaceful business environment for petroleum operations

Establish a progressive fiscal framework that encourages further investment in the petroleum industry whilst increasing accruable revenues to the Federal Government of Nigeria

Create a commercially viable National oil company

Deregulate petroleum product prices

Create efficient regulatory entities

Create transparency

Promote Nigeria content

Protect health, safety and environment,”

Onuegbu further argued that “It is heartening to see that one of the fundamental objectives of the PIB is to create transparency. Unfortunately this seems to be lacking in the way and manner the PIB is being legislated. It is a huge disappointment for Nigerians to learn that there are four versions of PIB, which is supposed to ensure transparency in the Nigerian petroleum industry.”

He noted that the Senate President recently admitted that there are three or four versions of the Bill, a development he described as “very worrisome” considering its importance to Nigeria’s future and economy. “It is therefore our demand that the National Assembly and the Federal Government exhibit utmost transparency in the process of legislating on the PIB into law, to assure Nigerians that the objectives of the PIB will be achieved and that the future of our country will not be short-changed.”

“The urgent need for transparency in the management and operations of the Nigerian oil and gas industry cannot be over emphasized. The absence of transparency breed corruption and corruption is the greatest impediment to the development of Nigeria.

Concerns and revelations about corruption in the oil and gas industry led to the establishment of the Nigeria Extractive Industries Transparency Initiative, NEITI, among others. It was therefore a huge sigh of relieve when the Petroleum industry bill was presented in September 2008 with   transparency as one of its fundamental objectives.”

He argued that the huge transparency gap in the Nigeria’s oil and gas industry, even after the implementation of the EITI process underscores the need for greater probity in the sector, judging by Nigeria’s index in the Revenue Watch Report.


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