Nigeria operates an old and outdated petroleum fiscal framework – Senate
The Senate today said it was regrettable that the country’s, existing fiscal framework for the petroleum industry is outdated. The Petroleum Industry Fiscal Bill, according to the senate therefore aims to fix the anomalies, especially with regards to royalty and tax regimes.
Dr. Bukola Saraki, Senate President Bukola Saraki while declaring open the public hearing on “the Petroleum Industry Administration Bill 2018; the Petroleum Industry Fiscal Bill 2018; and the Petroleum Host and Impacted Communities Bill 2018,” today in Abuja said the present administration’s reform agenda is driven by the need to overhaul a system that has led to corruption being endemic in the petroleum industry.
He said the government is motivated by the desire to usher in an internationalised framework that allows Nigeria to compete globally in terms of the petroleum industry.
“The objective of the Petroleum Industry Administration Bill is to transform the administration of the upstream, midstream and downstream sectors of the Nigerian petroleum industry.
“Firstly, the Bill creates a framework that will free up acreages that are not being developed by current license and lease holders, thereby creating opportunities for new investors. This will bring substantial new investment to our oil and gas industry.
“Secondly, it ensures effective management of the environment by petroleum operators and administrators.
“Thirdly, it provides a framework to unleash midstream activities which will open up the market for the supply of gas and other downstream products, for economic growth.
Accordingly, Saraki said the most important feature of the Bill is that it provides the much needed legal backing for the deregulation of the country’s downstream petroleum sector.
“Regrettably, our existing fiscal framework for the petroleum industry is outdated. The Petroleum Industry Fiscal Bill, therefore, aims to fix the anomalies, especially with regard to our royalty and tax regimes.
“For instance, billions of dollars have been lost through non-invocation of provisions in subsisting laws, at those times when crude oil price crosses certain thresholds.
“Perhaps the most critical objective of the Petroleum Industry Fiscal Bill is that it will enhance our international competitiveness and make Nigeria a choice destination for oil and gas investors.
He added that the ‘The Petroleum Host and Impacted Communities Bill’, which provides for a legal framework for the development of the petroleum host and impacted communities is a pan-Nigeria Bill that will cater for communities that are hosts to upstream assets, as well as significant midstream and downstream assets and infrastructure.
“We expect the Bill to make for greater harmony and partnership among the various stakeholders in the sector. I urge everyone to pay particular attention to presentations by representatives of host communities,” he said.