Page 6 - DMEA Week 29 2021

DMEA COMMENTARY DMEA

PIB already drawing criticism

Following the passage of a new law governing the oil
and gas sector, Nigeria’s government is beset by critics.

AFRICA NIGERIA’S government secured passage of the Workers (NUPENG) and the Petroleum and
Petroleum Industry Bill (PIB) earlier this month, Natural Gas Senior Staff Association of Nige-
when both chambers of the National Assembly ria (PENGASSAN) were also wary of the idea
WHAT: approved the draft law in its third reading. The of granting fuel import licences to only a few
Industry associations, stage is now set for President Muhammadu refineries. According to the sources, the unions
labour unions, Buhari to sign the bill, and he is expected to do have said they hope the National Assembly will
government agencies and so as soon as the Senate and the House of Repre- address the matter during the harmonisation
host communities have sentatives harmonise their versions of it. process, before the PIB is sent to Buhari for
all complained about the This is a significant achievement, given that signature.
provisions of the PIB. officials in Abuja have been trying (and failing)
to put a new legal regime in place for the oil and Labour unions and regulatory agencies
WHY: gas industry since 2009. However, it does not PENGASSAN and NUPENG have additional
The long-awaited mean that the debate over how best to govern concerns about the bill.
legislation will not solve the sector is over. For one thing, the two groups are disap-
all of the petroleum In fact, the PIB has drawn a significant pointed that the PIB does not carve out a larger
industry’s problems. amount of criticism since its passage in the role for labour unions, Vanguard’s sources said.
National Assembly. This essay will examine They want to see the government reserve seats
WHAT NEXT: several of the complaints that have been lodged on the board of the country’s new regulatory
Compensation for host against the bill. agencies for representatives of PENGASSAN
communities is still a and NUPENG, they stated. This will help protect
thorny issue and may Fuel import restrictions the interests of oil and gas workers, they said. It is
continue to drive up One of these complaints concerns the down- also in line with global best practices and would
production costs. stream sector and access to the domestic petro- help promote transparency and accountability
leum product market. in the oil and gas industry, they added. (More-
According to two Nigerian trade associations, over, it has the support of the Nigeria Labour
the Major Oil Marketers Association of Nigeria Congress, or NLC, according to a report from
(MOMAN) and the Depot and Product Market- the Leadership newspaper.)
ers Association of Nigeria (DAPPMAN), the PIB Vanguard’s sources also noted that NUPENG
includes provisions that allow only a few select and PENGASSAN still oppose the provisions of
Nigerian refiners to import petroleum products. the PIB that called for the establishment of two
In a joint statement, the groups reported that regulatory agencies – one to oversee downstream
these restrictions covered all types of refined and midstream activities and another to over-
fuels – even those for which Abuja has already see upstream activities. The unions continue to
liberalised the rules governing permission to believe that the industry would be better served
import, such as base oils, diesel, kerosene and by the formation of a single agency that could
LPG. They also alleged that the restrictive pro- serve as a “one-stop shop” for investors, they said.
visions had been introduced secretly during the They also maintain that doing so would stream-
legislative process. line interactions between investors and the gov-
Clement Isong, the CEO of MOMAN, and ernment, they commented.
Olufemi Adewole, the executive secretary of
DAPPMAN, said in the letter that they wanted Weights and measures
to ensure that there was a level playing field Meanwhile, Nigeria’s Federal Ministry of Indus-
for Nigerian companies. If only a few refinery tries, Trade and Investment has complained
operators have the ability to import petroleum about provisions of the PIB that pertain to
products, the domestic fuel market will be less weight and measurement standards.
competitive and prices are likely to rise, they In a note submitted to the National Assembly
wrote. “Allowing imports by major players earlier this week, the ministry expressed concern
across the supply chain will protect consum- about the possibility that the bill might encroach
ers by ensuring that local pump prices are not upon its own authority by assigning responsibil-
higher than regional or international prices,” ity for maintaining certain standards – namely:
they added. “verification/fiscalisation, calibration and certifi-
MOMAN and DAPPMAN are not the only cation of all measuring instruments used at both
critics of these provisions, according to Van- upstream and downstream sectors of the petro-
guard. Sources told the newspaper last week that leum industry in line with international prac-
the Nigeria Union of Petroleum and Natural Gas tices and procedures; quantity determination of

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