Oil marketers in the Nigeria’s petroleum downstream sector have expressed concern that the National Assembly which first slated the first quarter of 2021 for the passage of Petroleum Industry Bill (PIB) has not delivered on its promise.
They said as a result of this development, Nigeria risks losing the value and benefits of oil as it lost the value of coal.
The marketers, who spoke to NATIONAL ECONOMY on the condition of anonymity via telephone yesterday alluded that coal was not depleted in Enugu; instead, technology and the passage of time rendered the once viable source of industrial energy valueless today.
They further illustrated that the Stone Age did not end because the world ran out of stones, but because technology rendered it valueless.
While also noting that the laws governing the petroleum industry is as old as 1969, they expressed amazement that a 52- year old law was still guiding the running of the petroleum industry in 2021, adding that they could not fathom what is so difficult about passing the PIB almost 15 years after it first originated from the executive arm of government.
According to them, developed countries, which demand oil most, are making conscious decisions about transitioning from fossil fuel to alternative sources, which may render crude oil from producing countries like Nigeria less viable.
That, according to them, puts Nigeria, which depends on crude oil for 65 per cent of government revenue and 90 per cent for foreign exchange on the precipice.
They further said this is the time to hurry up and get the best out of oil before the demand for the product disappears, stressing that even for the country to accomplish its objective of economic diversification, it still needs funding from oil.
They said not passing the bill now would have a huge negative impact on the economy, adding that the promise of the bill had created uncertainty for foreign investors, thus discouraging new investments from that source, which constitutes the bulk of investments in that sector.
They further argued that after 13 years of dilly dallying with the PIB, there had been promises from members of the National Assembly that the bill would be passed into law by the first quarter in 2021. When that ambition was not realised, there was another promise for April, then May, then June.
But as of date, they pointed out, a committee is still working to perfect it, even as today marks the beginning of mid-June.
In a related development, Royal Dutch Shell Plc’s oil-drilling unit in Nigeria yesterday urged the federal government to pass the long-delayed legislation to reform the country’s petroleum industry, which the senate said it plans to take up this month.
“For every month and every week that we delay, investment fund is moving somewhere else,” Bayo Ojulari, managing director at Shell Nigeria Exploration and Production Company said at an oil conference in Abuja.
“We’ve got the commitment that it will come up in June. We’ve heard that before and we are waiting to see,” he added.
The legislation, which was first presented in the National Assembly in 2008, would streamline how energy assets in Africa’s largest oil producer are operated and funded. It would also regulate the oil industry and attract more investment to the sector, according to lawmakers. Senate President Ahmad Lawan said on Monday that he expects the bill to be passed this month.
The bill, known as the Petroleum Industry Bill or PIB, has been held up by political wrangling and objections from international oil companies that say the government is demanding an excessive increase in revenues. The current version of the legislation includes input from all stakeholders.
“It’s important to pass the PIB, but all of us collectively need to think about how we implement it to ensure that the energy transition does not make the PIB obsolete the day it’s passed,” Ojulari said.
Meanwhile, the Major Oil Marketers Association of Nigeria (MOMAN) yesterday said it was optimistic that the passage of the Petroleum Industry Bill (PIB) would lead to free market for players in the industry.
Chairman, MOMAN Mr Tunji Oyebanji, said the bill currently before the National Assembly was needed to reposition the industry due to the impact of the COVID-19 pandemic.
Oyebanji spoke at the ongoing 2021 Nigeria International Petroleum Summit (NIPS) in Abuja.
The summit has at its theme: “From Crisis to Opportunities: New Approach to the Future of Hydrocarbons.”
He said the oil and gas industry in Nigeria was fraught with price regulations which made it unattractive for much needed investments.
Oyebanji said MOMAN was in support of the full deregulation of the industry and was optimistic that it would be heralded by the passage of the PIB.
“There are a lot of opportunities that a truly open and free PIB will present if that is what will be made available to us at the end of the day,”he said.
Oyebanji also reiterated that MOMAN was ready to support the federal government’s autogas scheme aimed at deepening gas utilisation in Nigeria.
He, however, noted that there have been little investment in that area, hence, the need for collaboration between its members, government, Central Bank of Nigeria and other commercial banks.