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Oil refinery

The new Petroleum Industry Bill is going to make the Petroleum Minister more powerful than she already is if it passes through the National Assembly as submitted by President Jonathan.

Mrs Diezani Alison-Madueke will become chairman of the boards of plum parastatals in the ministry and also have powers to scrap the Petroleum Equlisation Fund which ensures the uniformity of petrol prices all over the country, according to contents of the bill, a copy of which was seen by Daily Trust in Abuja yesterday.

Boards of agencies and parastatals are generally chaired by persons other than the minister of the supervising ministry.

But if lawmakers pass the PIB provisions as they are, Mrs Alison-Madueke will become chairman of the boards of the Petroleum Technology Development Fund (PTDF), National Petroleum Assets Management Corporation and Petroleum Equalisation Fund.

Apart from chairing the boards of these agencies, the minister will be resposnbile for recommending to the President who to appoint as chief executives and as members of the boards.

She will also be directly supervising the activities of the Petroleum Technical Bureau and the Upstream Petroleum Inspectorate, and also recommend its officials for appointment.

The minister will have powers to decide when to scrap the equalisation fund, which provides "bridging" monies to petrol marketers to cover losses they incur in transporting fuel products up North, so as to achieve uniformity of prices.

"Where the government decides that petroleum product markets have been effectively deregulated, the minister shall take the required actions to ensure that the Equilisation Fund ceases to exist and its assets and liabilities transferred to the government to be controlled and managed by the ministry and at such time the provisions of the sections of this act relating to the equilisation fund shall stand repealed," the bill said in section 100 (4)

Experts say the minister's already excessive powers are causing setback in the industry.

In May, the House of Representatives recommended to President Jonathan to split the office of the Petroleum Minister into two so as to share out the workload and whittle the overbearing powers concentrated in the hands of one person. The House made the recommendation after uncovering a N1 trillion oil subsidy fraud for which agencies under Mrs Alison-Madueke's watch were indicted.

Yesterday, Mrs Alison-Madueke said the new PIB takes care of concerns of the international oil companies in a way that will engender a win-win situation for Nigeria as well as stakeholders in the industry.

She spoke when she received a delegation of the US government led by Mr. Michael Froman, a Deputy Assistant to the US President and Deputy National Security Adviser for International Economic Affairs.

Another NDDC-style fund coming

The bill also provides for the setting up of a Petroleum Host Community Fund in to which all oil companies will pay 10 per cent of their profit from upstrem activities. This will make hundreds of billions available for the development of the Niger Delta, in addition to the funds provided to the Niger Delta Development Commission (NDDC) and the Ministry of Niger Delta.

For the year 2012, NDDC is proposing a budget of N250 billion, while a similar amount was spent by the agency in 2011.

Under the new bill, the Nigerian National Petroleum Corporation is to be unbundled into several companies, including the National Oil Company and the National Gas Company.

The Petroleum Products Pricing and Regulatory Agency (PPPRA) and the Department of Petroleum Resources (DPR) will be scrapped and their roles be taken over by an agency to be named Downstream Petroleum Resources Agency.

The bill was presented to the Senate and the House of Representatives yesterday, shortly before they proceeded on a recess that will end in September.

After Speaker Aminu Waziri Tambuwal read the President's letter forwarding the bill, Minority Leader Femi Gbajabiamila (ACN, Lagos) objected to its first reading because the President asked for "expeditious passage" when he knew the House was going on recess.

"(It) would be said that the President has done his job while its the parliament that is delaying it. I will ask that the bill be returned to the President until we resume in September," he said.

Tambuwal said him and Senate President David Mark have engaged the President on the matter and he promised to submit the bill in June. "But today is July 18. The Nigerian public should know that we are very much alive to our responsibilities so this delay is not from us," he added.

Tambuwal said he had told the President to forward 500 copies of the bill to the National Assembly for circulation to members because of stories making the round that there are fake copies in circulation but "only three copies were delivered to my office; we are still awaiting 497 copies."

The PIB is an important legislation that will unlock billions of dollars of delayed investment, help boost oil production and promote interest in the world's seventh largest gas reserves, which are largely untapped, Reuters news agency reported.

But industry experts have warned that recent drafts have watered down and delayed many of the original reforms proposed in 2007, which could limit the impact of the PIB, although most stakeholders agree that any law is better than the current uncertainty.

The PIB has been in the making for more than five years but powerful vested interests blocked progress while lawmakers, oil companies and the federal government disagreed on terms.