By Felix Ayanruoh

If there’s a better petroleum law in the books or proposed than the draft Petroleum Industry Bill (PIB) before the National Assembly, I’d like to know what it is.

The PIB to a large extent is reform legislation, geared towards establishing a robust legal and regulatory framework that will put in place clear rules, procedures and institutions for the administration of the petroleum industry in Nigeria. The proposed law will create a standard business practice, protect health, safety and environment in the course of Petroleum Exploration and enhance exploration and exploitation of petroleum.

Also, the PIB provides for a clear, transparent and accountable framework aimed at the development and revenue derivation of the country’s deep and ultra-deep offshore blocks pursuant to its long-term additional reserves and national revenues.

We need a reality check. Attacking the PIB is misconceived, cruel, inflammatory, disturbing and unnecessary. It needs to stop. The demagogues would have the public believe that the PIB will eliminate the 13 percent derivative revenue that accrues to oil producing states, impact on transfer pricing on revenues accruing to the federal government would be devastating.

Furthermore, International Oil Companies (OICs) allege that fiscal regime proposed under the new law risk cutting output by 25 percent by 2022, and would be injurious to potential investors among others. Nothing could be further from the truth.

To begin with, the available evidence overwhelmingly indicates that the allegation that the split of the Petroleum Profit Tax (PPT) in the extant PPT Act into the Nigerian Hydrocarbon Tax (NHT) and Company Income Tax (CIT) under the PIB would erode the revenue accruing to the oil producing states under the PPT Act is not correct. The issue of 13 percent derivative is constitutionally guaranteed under Section 162(2) of the 1999 constitution. Its prima facie safeguard under Section 162(2) of the Nigerian constitution is not in question; nor is there a credible dispute to its effectiveness under the PIB.

Section 162(2) of the 1999 Constitution provides that “… with regard to any revenue allocation formula, the principle of derivation shall be constantly reflected in any approved formula as being not less than 13 per cent of the revenue accruing to the Federation Account directly from any natural resources.”

Assuming without conceding the fact that the PIB will indeed erode the 13 percent mentioned above, the section of the law will ipso facto be null and void. Section 1(1) of the 1999 constitution provides that, “This Constitution is supreme and its provisions shall have binding force on the authorities and persons throughout the Federal Republic of Nigeria.”

Additionally, Section 1(3) provides that, “If any other law is inconsistent with the provisions of this Constitution, this Constitution shall prevail, and that other law shall, to the extent of the inconsistency, be void.”

Given these predicates, a non-issue has been fabricated. By the use of smoke and mirrors, persistent innuendos and intellectual sleight of hand, the objective is to rubbish a good law and deny the Nigerian people the benefits of their God given resources.