Connect with us

Economy

PIB Faces Uncertain Future as Elections Draw Near

Published

on

edo-election
  • PIB Faces Uncertain Future as Elections Draw Near

Against the backdrop of the refusal of President Muhammadu Buhari to assent to the Petroleum Industry Governance Bill and as electioneering intensifies ahead of the 2019 elections, industry experts have expressed doubt about the Petroleum Industry Bill becoming law in the current administration.

A key obstacle to the growth of the nation’s oil and gas industry has been widely described as the regulatory uncertainty caused by the delay in the passage of the PIB.

The bill, which seeks to change the organisational structure and fiscal terms governing the industry, suffered setbacks in the 6th and 7th National Assembly.

To fast-track its passage into law, the current National Assembly decided to split the bill into four parts – the PIGB, Petroleum Industry Administration Bill, Petroleum Industry Fiscal Bill and Petroleum Host Community Bill.

After its passage by both the Senate and the House of Representatives, the PIGB was transmitted to the President for assent in July to enable it to become law but it emerged last week that Buhari declined to accent to the bill.

The Senior Special Assistant to the President on National Assembly Matters (Senate), Ita Enang, identified the provision of the PIGB permitting the Petroleum Regulatory Commission to retain as much as 10 per cent of the revenue generated as one of the reasons Buhari declined assent to the bill.

A petroleum expert, Mr Bala Zakka, in a telephone interview with our correspondent, said, “As far as the oil and gas industry is concerned, there is every reason to say that the inability of Nigeria to pass the PIB into an Act is an indication and demonstration of lack of seriousness. There is a justification to conclude also that Nigeria does not know the benefits that will accrue to the country by passing the PIB.”

Bala, who noted that he did not support the splitting of the PIB into four parts, said he was not surprised that the President didn’t assent to the PIGB.

He said, “If we want a good job done on the entire PIB, then this 8th National Assembly cannot meet up. As you can see, only the PIGB has been passed to the President for assent. There are three other bills and the fiscal regime bill and the host community bill are even more contentious. So, if you have those three bills waiting, that means they have only done 25 per cent.

“And most of the National Assembly members are fighting for their political survival in their respective constituencies, and we are already in the heat of the campaigns before the elections. So, there is likelihood that nothing will be achieved. It is very clear that the PIB will outlive the 8th National Assembly.”

A former President of the International Association for Energy Economics, Prof. Wumi Iledare, is of the view that the other three bills are anchored on the PIGB.

He said, “The National Assembly can go back and rework the rejected bill by the President into the administration bill. In that case, the administration bill then becomes the governance and administration bill. That is a possibility. However, the political environment is even toxic because the entire National Assembly is now fragmented. In my opinion, to be able to override the President’s position because now, it is about the APC and the PDP.”

The Chairman, PENGASSAN and NUPENG National PIB Committee, Mr Chika Onuegbu, said recently that the country had lost some $235bn of investments due to its inability to legislate on the proposed reforms in its oil and gas industry.

He said over $15bn yearly investments were withheld or diverted by investors to other countries because of the uncertainty as investors did not know which rules would guide their investments.

According to him, $120bn could have been earned in six years, from 2010 to 2016, had the reforms proposal (PIB) been passed into law in 2009.

Some industry experts have said the President’s rejection of the PIGB poses a significant setback to the oil and gas industry reforms.

The reform efforts, which date back to April 2000 when the government of President Olusegun Obasanjo set up the Oil and Gas Reform Implementation Committee, have suffered serious setbacks.

Onuegbu, in a telephone interview with our correspondent, said, “We must remember that the National Assembly members are politicians; the President is a politician. Politics is about dialogue; so whenever things that ordinarily should be resolved by dialogue are not being done so by politicians, then it calls for concern.

“I think that there is still an opportunity for the National Assembly and the President to close ranks and ensure that we have a PIGB, and that others are passed into law. Now, I don’t know what is going to be the fate of the Host Communities Bill, which the people of the Niger Delta are looking forward to; I don’t know what is going to be the fate of the Fiscal and Administration Bills?

“I want to be optimistic that the PIB will be passed because it is in the interest of the country; the PIB has become a huge project. So, if we cannot get it right this time and pass it into law, it means that we will be talking about reform for 20 years. While we are talking about reform, the new energy transition is staring us in the face. So, I think, as a country, we should come together and move the oil and gas industry forward.”

Another expert said, “The option available is for the National Assembly to overrule the President. This would require a two-third majority of members present and voting in both houses of the National Assembly. In view of the current political climate, this does not seem likely.”

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

Dangote Fertiliser Plant to Commence Shipment of Urea in March 2021

Published

on

Dangote to Sells Petrol in Naira, Plans to Commence Urea Shipment in March 2021

The Governor of the Central Bank of Nigeria, Mr. Godwin Emefiele, has said Dangote Fertiliser Plant will commence shipment of Urea in March 2021.

The CBN governor disclosed this during an inspection tour of the sites of Dangote Refinery, Petrochemicals Complex Fertiliser Plant and Subsea Gas Pipeline at Ibeju Lekki, Lagos on Saturday.

Emefiele further stated that Dangote Refinery would sell refined petroleum products in Naira when it starts production.

This he said would save the country from spending 41 percent of the nation’s foreign exchange on importation of petroleum products yearly.

Based on agreement and discussions with the Nigerian National Petroleum Corporation and the oil companies, the Dangote Refinery can buy its crude in naira, refine it, and produce it for Nigerians’ use in naira,” Mr Emefiele said.

That is the element where foreign exchange is saved for the country becomes very clear. We are also very optimistic that by refining this product here in Nigeria, all those costs associated with either demurrage from import, costs associated with freight will be totally eliminated.

Emefiele explained that this will make the price of Nigeria’s petroleum products affordable and cheaper in naira.

If we are lucky that what the refinery produces is more than we need locally you will see Nigerian businessmen buying small vessels to take them to our West African neighbours to sell to them in naira.

“This will increase our volume in naira and help to push it into the Economic Community of West African States as a currency,” Mr Emefiele said.

Continue Reading

Economy

UK Budget 2021: Will Sunak’s Budget Run Into Unintended Consequences?

Published

on

UK EConomy contracts

Rishi Sunak’s Budget will encourage higher earners to consider their “international financial options” and will drive businesses away from the UK, warns the CEO of one of the world’s largest independent financial advisory and fintech organizations.

The warning from Nigel Green, chief executive and founder of deVere Group, comes as the Chancellor delivered his 2021 Budget in the House of Commons, his second since he took on the role.

Mr Green says: “The Chancellor has got an extraordinarily difficult hand to play as he tries to stem the economic damage caused by the pandemic, support jobs and businesses and, crucially, rebuild the public finances.

“Whilst Mr Sunak is being hailed a hero for the continued and unprecedented levels of support, it should also be remembered that he is – in a stealth move – dragging more people firmly into the tax net.

“He is raising taxes under the radar.

“Yes, there is no income tax rise. However, he is freezing personal tax thresholds, meaning as incomes rise and thresholds don’t, he is able to raise money by fiscal drag.”

Earlier this week, the deVere CEO noted: “Those most impacted by this stealth move will be looking at the financial planning options available to them, including international options, in order to grow and protect their wealth.”

Rishi Sunak also confirmed that corporation tax will increase to 25% from 2023, up from the current level of 19%.

Of this tax hike, Mr Green goes on to say: “Lower corporation tax helps job and wealth-creating business to survive and thrive. It also helps attract business to move and invest in the country.

“Instead of increasing taxes, Mr Sunak should have relentlessly focussed on growth and stimulus policies for businesses.  This would have been of greater help to firms, the economy, jobs and, ultimately, the Treasury’s coffers.”

He adds: “Again, this corporation tax hike is likely to serve as a prompt for businesses to consider their overseas financial options.”

The deVere CEO concludes: “The Chancellor had to perform a tough juggling act.  But stealthily dragging more people into the tax net and raising corporation tax might have negative, unintended consequences for the Treasury’s bottom line.”

Continue Reading

Economy

Electricity Consumers Get 611,231 Meters Under MAP Scheme

Published

on

power project

Electricity Consumers Get 611,231 Meters Under MAP Scheme

A total of 611,231 meters have been deployed as at January 31, 2021 under the Meter Asset Provider initiative since its full operation despite the COVID-19 pandemic and other extraneous factors, the Nigerian Electricity Regulatory Commission has said.

NERC disclosed this in a consultation paper on the review of the MAP Regulations.

The proposed review of the MAP scheme is coming nearly four months after the Federal Government launched a new initiative called National Mass Metering Programme aimed at distributing six million meters to consumers free of charge.

“The existence of a huge metering gap and the need to ensure successful implementation of the MYTO 2020 Service-Based Tariff resulted in the approval of the NMMP, a policy of the Federal Government anchored on the provision of long-term low interest financing to the Discos,” NERC said.

The commission had in March 2018 approved the MAP Regulations with the aim of fast-tracking the closure of the metering gap in the sector through the engagement of third-party investors (called meter asset providers) for the financing, procurement, supply, installation and maintenance of meters.

It set a target of providing meters to all customers within three years, and directed the Discos and the approved MAPs to commence the rollout of meters not later than May 1, 2019.

But in February 2020, NERC said several constraints, including changes in fiscal policy and the limited availability of long-term funding, had led to limited success in meter rollout.

NERC, in the consultation paper, highlighted three proposed options for metering implementation going forward.

The first option is to allow the implementation of both the NMMP and MAP metering frameworks to run concurrently; the second is to continue with the current MAP framework with meters procured under the NMMP supplied only through MAPs (by being off-takers from the local manufacturers/assemblers).

The third option is to wind down the MAP framework and allow the Discos to procure meters directly from local manufacturers/assemblers (or as procured by the World Bank), and enter into new contracts for the installation and maintenance of such meters.

“Customers who choose not to wait to receive meters based on the deployment schedule of the NMMP shall continue to have the option of making upfront payments for meters which will be installed within a maximum period of 10 working days,” NERC said.

The regulator said such customers would be refunded by the Discos through energy credits, adding that there would be no option for meter acquisition through the payment of a monthly meter service charge.

“Where meters have already been deployed under the meter service charge option, Discos shall make one-off repayment to affected customers and associated MAPs. Such meters shall be recognised in the rate base of the Discos,” it added.

NERC urged stakeholders to provide comments, objections, and representations on the proposed amendments within 21 days of the publication of the consultation paper.

Continue Reading

Trending