Why Buhari signed PIB – Amadi, Ex-NERC Chair

From Aidoghie Paulinus, Abuja

Former Chairman and Chief Executive Officer of the Nigerian Electricity Regulatory Commission (NERC), Mr Sam Amadi, has said President Muhammadu Buhari signed the Petroleum Industry Bill (PIB) into law because it met his strategic considerations for the oil and gas sector.

Amadi, in a Facebook post, explained that the bill was a much improved outcome for the sector.

He explained that the major winners were the oil majors and the government, while the seeming losers in the short term and in terms of bargaining may be the communities.

“President Buhari signs the PIB. It is now Petroleum Industry Law or Act. While facilitating a retreat for the board of the NIEITI, I assured that the president will sign it in spite of the political pushback by South South leaders on account of the failure to upgrade the Host Community Development Trust Fund from three to five percent. The President will sign because the bill meets his own strategic considerations for the sector.

“The bill is a much improved outcome for the sector. The major winners are the oil majors and the government. The seeming losers in the short term and in terms of bargaining may be the communities,” Amadi said.

Amadi however said a few things need to be straightened by regulation and policy to mitigate the risks in the Frontier Exploration Fund which could become both a disincentive to move out of the petrol-dollar state and also a corruption enabler if not managed well.

“We need an executive order indicating that although by law 30 percent of NNPC Ltd profit is dedicated to FEF, it will not be used unless actioned by clear legislative approval of the budget and work plan. This sort of administrative and legislative bottleneck does not amount to an amendment of the law, but increases the costs of reckless expenditure and continuing incentives to commit to oil and gas to the detriment of non-oil economy,” Amadi added.

Amadi further said another area of concern was the mainstreaming of ministerial power in regulatory matters.

This, he stated, can undermine regulatory certainty and independence which is the main enabler of deregulated, market-led oil and gas sector.

“We need a more robust business rule and regulatory design to get over this risks.

“Furthermore, although we did not get five percent for the oil communities, the structure of the HCDF is such that we could actually see a better infrastructural development with the market-based approach in this new law. It depends on the grand design and tactical approach in implementing the new law.

“Nevertheless, I think it is a good development that the PIB was signed into law by the President,” Amadi also said.