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PIB: Reps Slash Levy On Oil Companies

Dyepkazah Shibayan, Abuja

Continuing with the Consideration of Report on the Petroleum Industry Bill (PIB), the House of Representatives yesterday reduced the proposed levy on oil companies for the operation of Petroleum Host Communities Fund from 10 per cent to 7.5per cent. The fund, which is expected to cater for the mitigation of all negative environmental impacts on host communities arising from exploratory activities of oil companies, was slashed following argument that any attempt to retain the 10 per cent may have negative effect on future investments in the sector.

The provision as contained at Clause 116 to 118 of the Petroleum Industry Bill currently being considered in the House. It seeks to create the fund independent of whatever interventionist agencies that already exist. First observation on Clause 116 was raised by Hon. Leo Ogor, who raised issues on the independence, or otherwise, of the issue in terms of legislation and administration. “When you look at the proposal, there are too many technicalities that have been added here. So I would suggest that every operator, both in the upstream and downstream sector of the industry, pay a given percentage for the operation of the fund”, Ogor argued. Following his submissions, Hon. Sokonte Davies proposed an amendment to the effect that whatever monies accruing to host communities shall be subject to the approval of the National Assembly.

The amendment was seconded by Hon. Zakari Mohammed and passed on voice vote. Chairman of the Ad-hoc committee on PIB, Ishaka Mohammed Bawa, also suggested a reduction of the proposed percentage. He argued that host communities would soon increase “given the discovery of oil in many places in the North which will raise the stake on investors”. He said “whatever we do, we must take into cognisance the implications of the impact this is likely to have on future investment in the sector”. He explained that oil producing communities would soon extend to all the states in the Northwest and Northeast except Sokoto and Kebbi. Following the interventions, the House agreed to reduce the percentage from 10 percent to 7.5 percent covering both upstream and downstream sectors of the industry. Another aspect of the fund which raised observation from Hon. Robinson Uwak was the need to eliminate all encumbrances in the way of effective administration of the fund, with a view to ensuring maximum benefits to the host communities. “As a people from oil host communities, we are privy to some of the challenging issues.

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