Nigeria: Industry, Trade Ministry Raises the Alarm Over PIB

14 July 2021

Abuja — The Federal Ministry of Industries, Trade and Investment has raised the alarm over what it called strange sections proposed in the Petroleum Industry Bill (PIB), which if passed will compound the culture of secrecy and lack of transparency in the oil sector.

This, it said, would negate global best practices.

In a submission made to the National Assembly, the ministry said it has discovered that strange sections, which were not part of the original bill that was discussed during the Senate Public Hearing, have found their way into the bill, saying they are capable of eroding the constitutional functions of the Weights and Measures Department of the Ministry of Industries, Trade and Investment.

In the memorandum, which was made available to THISDAY, the ministry argued that the Weights and Measures Act and the Pre-Shipment Inspection for Export Act evidently recognise the department as an "indispensable economic activity" of the federal government towards attaining its fiscal goal and implementation of the attendant fiscal policies.

"The PIB, therefore, intends to take over the functions of Weights and Measures thus: Verification/fiscalization, calibration and certification of all measuring instruments used at both upstream and downstream sectors of the petroleum industry in line with international practices and procedures; quantity determination of petroleum and gas products for trade purpose," the ministry stated.

The ministry argued that for the purpose of accountability, transparency and checks/balances, issuance of a pattern of approval certification for measuring instrument used in the petroleum, and introduction of modern measuring instruments that will guarantee accurate measurement in the oil sector are better handled by trained professionals in the ministry.

The Ministry of Industry, Trade and Investment continued, "It should also be noted that if the proposed Bill is passed into law as it is, the Weights and Measures activities of the government of the Federal shall become extinct as far as the petroleum industry is concerned.

"The obvious negative implication of such an act on the fiscal policies of Nigeria and the attendant huge losses of revenue resulting from the failure of calibration of the relevant equipment for ensuring the accuracy of the quantum of crude oil exported from Nigeria would be catastrophic.

"Allowing the offending sections will create two parallel legal metrology institutions in Nigeria which is against the principle of legislative drafting to give the same powers twice to two different institutions. Also, the offending sections will only legalize the Department of Petroleum Resources under the proposed Nigerian upstream Regulatory Commission, encroachment on Weights and Measures functions."

Warning against the passage of the bill in its present form, the ministry explained that the survival of the Nigerian economy depends largely on the oil sector and concentration of powers to supervise such a sensitive sector in the hands of one agency is not recommended in deference to demand checks and balances, accountability, and transparency.

"The identified provisions of the Petroleum Industry Bill 2021 would amount to complete erosion of the statutory functions of Weights and Measures in the oil sector of the economy which is against the international convention and industry practices all over the world.

"Nigeria is a member of the International Community and can therefore not act in isolation of trade practices all over the world", the ministry said.

According to the eight-page memorandum, research has shown that nowhere in the world including the oil-producing countries of which Nigeria is a member is the administration of weights and measures of the oil sector is exclusively reserved for a particular petroleum regulatory agency such as being contemplated for the Nigerian Petroleum Regulatory Commission.

The ministry argued that globally, weighing and measurement, and metering activities as it relates to domestic and international trade is being coordinated and harmonized by the International Organization of Legal Metrology (OIML) of which Nigeria is a corresponding member.

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