With the presidential assent to the new petroleum sector regime, the Nigerian National Petroleum Corporation (NNPC), the Petroleum Equalization Fund (Management) Board (PEF) and the Petroleum Products Pricing Regulatory Agency (PPPRA) are required to wind down, Daily Trust newspaper reports.
The Petroleum Industry Act (PIA) provides legal, governance, regulatory and fiscal framework for the Nigerian petroleum industry, the development of host communities and related matters.
The Senate and the House of Representatives had passed the bill in July, ending a long journey, which commenced in the early 2000s, for the creation of a proper corporate governance of the oil sector.
The Petroleum Industry Act 2021, amongst other thing, provides for the winding down of the PEF and PPPRA, and the commercialization of the NNPC.
To begin the unbundling of the NNPC, the petroleum minister is mandated by the new Law to incorporate a limited liability company, to be known as NNPC Limited, within six months after the commencement of the Act.
It also stipulates that 30 per cent of NNPC Limited’s profit in the production sharing, profit sharing and risk service contracts be used to fund the oil exploration in frontier basins.
The commercialization of the NNPC is also expected to bring to expiration the policy of fuel subsidization in Nigeria.
An Abuja-based economic analyst, Simon Samson Galadima said the PIA, if implemented thoroughly, should turn around the country’s fortune for good. “It would make the NNPC more productive and efficient. It would reduce government interference and increase the bottom line,” the analyst said.
On subsidy removal, he said it might seem like a bitter pill to swallow, but it is a necessary evil.
“True! It would be tough for the masses in the short run. However, it will yield bountifully down the road for the masses in particular and the economy generally. As the resources being lavished on subsidy are better used for health, education and infrastructure.”
Meanwhile, the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) has allayed fears of job losses following the new PIA.
Speaking on telephone, NUPENG President, Comrade Williams Akporeha, said, considering scrapping some agencies like Petroleum Equalization Fund (PEF), PPPRA and others, the personnel involved will be posted to other places where their services would be useful.
“We are sure that there will be no job losses in oil and gas. Those persons involved will be moved from that place to another. We will move around the system, there will be no job loss. That is the assurance we can give to our members.’’