By Yinka Kolawole and Mariam Eko
The President of theNigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Mr Dele Oye, has called for a review of the barely three years old Petroleum Industry Act, 2021 citing its inherent operational complexities, duplications and ambiguous delineation of roles which could impede efficiency.
Speaking at the National Assembly retreat themed, Navigating Change: Legislative Strategies for Economic Transformation, earlier in the week, the NACCIMA boss highlighted areas of the challenges with the PIA including regulation and administrative bottlenecks; security concerns; economic stability; cost recovery and fiscal regimens; incentivizing gas utilization; encouragement investments; environmental considerations; community engagement and development; as well as transparency and accountability:
According to him, it is now time to consider a review that brings about streamlined operations, reducing redundancy, and fostering a clear regulatory path.
He stated: We must consider a review that brings about streamlined operations, reducing redundancy, and fostering a clear regulatory path.
The issue of general insecurity remains a significant impediment to growth. Legislative attention must focus on crafting policies that bolster security frameworks, ensuring the safety of investments and personnel in the sector.
The PIA must be revisited to address the challenges of unstable customs duties and exchange rate volatility that have engendered an uncertain investment climate. We recommend a review of the relevant provisions to promote economic stability, which is crucial for the predictability needed by investors.
The current cost recovery mechanisms under the PIA need to be reassessed to ensure they are aligned with best practices and supportive of long-term investment.
He further noted, While the Act imposes penalties for gas flaring, there is a significant opportunity for legislative review that shifts the focus towards incentivizing investments in gas capture and utilization.
The PIA, in its current form, does not sufficiently incentivize investment in the oil and gas sector. We propose a legislative review that considers tax breaks, grants, and other incentives for investors, particularly in the exploration and development of new frontiers.
The environmental impact of oil and gas operations is a pressing concern. The Act should be re-examined to strengthen environmental regulations and ensure that they align with international standards, thus safeguarding our environmental heritage for future generations.
The Host Community provisions within the PIA must be reviewed to ensure that there is equitable distribution of benefits and a clear framework for addressing the needs and concerns of communities affected by oil and gas operations.
The PIA must reinforce mechanisms that promote transparency and accountability, particularly in the areas of contract bidding, revenue management, and allocation of resources. This will not only foster trust within the industry but also ensure that the wealth generated contributes effectively to national development.
