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Petroleum Industry Bill and sectional interests

By The Citizen
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After years of twists and turns, the much awaited Petroleum Industry Bill is once more being assailed by narrow, vested interests. The latest assault by some legislators purporting to represent the 'North' could, for the umpteenth time, knock down the intended legislation and continue to hold up progress in our oil and gas sector. But mischief-makers should no longer be allowed to deny this all-important industry a relevant legal framework to meet today's challenges. And Nigerians should be mindful of oil-induced civil conflict.

The apparent grouse of lawmakers from the North is the proposal to reserve 10 per cent of all oil and gas earnings for the oil producing areas through the Petroleum Host Community Fund. Echoing other lawmakers from the North who had earlier vowed to frustrate its passage, Senator Bukar Abba Ibrahim of Yobe State complained that the additional 10 per cent for oil producing states was one revenue stream too many as such states already enjoyed seven other special sources. This rabid fixation on oil revenues has, in no small measure, contributed to the collapse of federalism, resulting in economic retrogression over the years.

Designed to bring petroleum laws up to date with global trends and present realities, the bill has nevertheless suffered interminable delays since it was first presented to the Sixth National Assembly in 2008, which later abandoned it after some time-wasting legislative manoeuvres.  It has suffered further tortuous journey since its reintroduction. After subsequently holding a public hearing in July 2009, the parliament once more succumbed to pressure from vested interests and abandoned the bill. Opposition has come from oil multinationals, who have behaved pretty much as they pleased for decades; from entrenched interests within the bureaucracy; and from the corrupt Nigerian National Petroleum Corporation, whose executives gorge themselves at public expense by exploiting the rampant opacity that defines its operations; from marketers, politicians and briefcase traders, who colluded with top bureaucrats to cream off over N2 trillion in fraudulent petroleum subsidy claims last year; and from sectional power brokers.

The responsibility for the diversification of the nation's revenue base lies with the government and parliament. A federal polity operates everywhere on the principle of considerable autonomy for its federating states, as well as fiscal and resource control. If, as Ibrahim said, 'nobody planted or farmed oil, it is God who put it there …', it is also true that all other parts of Nigeria are blessed with natural endowments. Northern states have unsurpassed advantage in agriculture and account for a greater quantity and variety of the 34 solid mineral types identified by the Solid Minerals Ministry as ready for exploitation. The governors and ACF would serve the interests of the impoverished Northern masses better by insisting on immediate exploitation of their abundant mineral deposits and the prudent management of revenues available to them.

Those who unreasonably seek to deny the oil producing states succour forget the enormity of the environmental degradation being suffered by Niger Delta communities. The United Nations Development Programme reported 6,817 oil spills between 1976 and 2001, an update of a Department of Petroleum Resources' estimate of 1.89 million barrels of crude spilled in the Delta in the 20 years to 1996, while the World Bank says the amount of oil spilled could be 10 times of the official reports. Millions of residents have lost farms, fishing and health due to contamination. As far back as 1993, Shell acknowledged in its Handbook that 'oil pollution could cause adverse impact on people (water quality), vegetation (smothering mangrove trees, crops, shore vegetation and fauna (fish, shellfish, and soil fauna).

Yet, it is often forgotten, or more appropriately ignored, that oil is an exhaustible mineral. According to a World Bank report, Nigeria's oil reserves will be depleted in 41 years. The World Bank chief economist for Africa, Shantayanan Devarajan, was quoted as saying last October that mineral wealth in African countries including Nigeria does not translate into prosperity for the people because the money accruing from it does not pass through the citizens, and the citizens do not see the wealth as theirs. What then happens to the Niger Delta communities when Nigeria runs out of oil and the people can neither farm nor fish?

There is no percentage of the oil wealth that can be considered too high to develop the area. It is a right, not a privilege. Various governments must shift their focus away from oil revenues and concentrate on other non-oil sectors. The recalcitrant legislators must move with the times; the era of beggar-states waiting for monthly stipends from the Federation Account is no longer sustainable. Economically, it is dragging the nation back by discouraging production and creativity. Politically, it entrenches a culture of indolence, rent seeking and entitlement; and, socially, it fosters insecurity as host communities are now militantly unwilling to accept a continuation of fiscal oppression.

The Northern lawmakers should drop their opposition and indeed, lawmakers from all six geopolitical zones should move quickly and pass the bill. Thereafter, they should press for the immediate exploitation of solid minerals that are available in all the 36 states in line with the PIB principles to foster federalism, stimulate industrialisation, boost exports, create jobs and reduce poverty.

For a nation that is dependent on oil revenues for 90 per cent of its revenues, the PIB is too important to remain mired in the divisive politics of resource-sharing that has made a mockery of our federal status and held back investments in the sector. This insufferable arrogance must be discarded.