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After passing the Petroleum Industry Governance Bill (PIGB), which stakeholders believe will address some challenges and gray areas in the oil industry, the Senate awaits presidential assent. This follows consideration and adoption of the Conference Committee report on the document.

Presenting the report, Chairman, Senate Committee on Petroleum (Upstream), Tayo Alasoadura, revealed that out of the 12 contentious areas in the bill, nine were resolved in favour of the Senate, as against three for the House of Representatives. It would be recalled that while the Senate passed the bill on May 25, 2017, the House of Representatives passed its version on January 25, 2018. The two chambers set up conference committees in line with extant laws to harmonise the two versions. The bill seeks to provide for the governance and institutional framework for the petroleum industry.

The PIGB seeks to unbundle the Nigerian National Petroleum Corporation (NNPC), provide for the establishment of the Federal Ministry of Petroleum Incorporated, Nigerian Petroleum Regulatory Commission, Nigerian Petroleum Assets Management Company and National Petroleum Company and Petroleum Equalisation Fund. The regulatory bill bulkanises the NNPC and creates the National Petroleum Commission, which takes over the functions of the Department of Petroleum Resources (DPR). Once the bill is signed into law, the Nigeria Petroleum Regulatory Commission will take over the functions of the Petroleum Inspectorate, Department of Petroleum Resources (DPR) and the Petroleum Products Pricing Regulatory Agency (PPPRA).

Besides, the bill empowers the Commission to administer and enforce policies, laws and regulations relating to all aspects of petroleum operation; monitor and enforce compliance with the terms and conditions of all leases, licences, permits and authorisations issued in respect of any petroleum operations; define and enforce approved standards for design, construction, fabrication, operation and maintenance for all plants, installations and facilities utilised or to be utilised in petroleum operations; establish, monitor, regulate and enforce health and safety measures relating to all aspects of petroleum operations; establish the framework for the validation and certification of national hydrocarbon reserves; advise the Minister on fiscal and other issues pertaining to the petroleum industry; undertake evaluation of national reserves and reservoir management studies. It also empowers the Commission to issue licences, permits or authorisations for downstream gas, petroleum products, storage depots, retail outlets, transportation and distribution facilities for the industry.

The bill imposed a five percent fuel levy, which would be used to finance the Petroleum Equalisation Fund as established under the bill. There shall be established the Petroleum Equalisation Fund into which shall be paid all monies payable to the Equalisation Fund by way of a 5 percent fuel levy in respect of all fuel sold and distributed within the Federation which shall be charged subject to the approval of the Minister (of Petroleum)” Section 36 (1) (a) of the bill states.

Other sources of funding the PEF include: subventions, fees and charges for services rendered as well as net surplus revenue recovered from petroleum products marketing companies. According to the Bill, the Equalisation Fund shall collect all revenues and levies charged; determine the net surplus revenue recoverable from any oil marketing company and accruing to that company from the sale by it of petroleum products at such uniform prices as may be fixed by the Minister; determine the amount of reimbursement due to any oil marketing company for purposes of equalisation of price of products among others.

In his remarks after the bill was passed, Senate President Bukola Saraki, who presided over the session, asked President Muhammadu Buhari to sign the bill into law.

Saraki stated, “I hope with this, we will get the assent of Mr. President and hopefully open a new page for the petroleum industry.”

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