Babaji Fowowe, a professor of economics and senior fellow with Agora Policy, has called for the amendment of the Petroleum Industry Act, PIA in order to boost petroleum revenue.
According to him after two years of the implementation of the PIA, it has not achieved its main purpose, as evidence suggests that the government has not derived maximum benefits from its petroleum assets.
In a report made available to Vanguard, he stated: “Our central argument is that the PIA should enhance maximum financial benefits to the Federation. After two years of implementation of the law, evidence suggests that the Federation is not deriving maximum benefits from its petroleum assets. Thus, it is essential that relevant sections of the PIA be re-examined and appropriate revisions made to channel more petroleum revenue to the Federation. Only then can the government realise the extra revenue urgently needed for critical expenditure needs.”
He stated further: “In principle, the PIA was supposed to attract investment into the country’s petroleum sector; enhance the regulatory and business framework; and increase revenue accruing to the Federation. In reality, however, none of these aims have been achieved.
“On the investment front, there has been an exodus of international oil companies (IOCs)”.
Fowowe argued that “the fact that the PIA went through such a long and arduous process, perhaps, led to so much jubilation at its passing and assent, and resulted in a misdirection of attention on the finer details of the Act and its implementation.”
He, however, stated: “President Bola Tinubu has been proactive in signing three Executive Orders to address the twin issues of attracting investment and enhancing the regulatory and business environment. Designed to make Nigeria’s petroleum sector globally competitive Oil and Gas Companies (Tax Incentives, Exemption, Remission, etc.) Order, 2024; Presidential Directive on Local Content Compliance Requirements, 2024; Presidential Directive on Reduction of Petroleum Sector Contracting Costs and Timelines”.
But he noted that “there is a need to address the third issue: revenue. After two years of implementing the PIA, evidence shows that the Federation has received significantly lower revenues from the petroleum sector, compared to the period before the law.”.
Source: Vanguard
