Support 3% Equity For Host Communities In PIB
The pervasive insecurity in the country is partly responsible for the dearth of investment in the Nigeria’s oil and gas sector, the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), has said.
President of the union, Osifo Festus, who disclosed this yesterday, at the grand finale of PENGASSAN security awareness campaign in Abuja, explained that while the three per cent contained in the Petroleum Industry Bill (PIB) as passed by the National Assembly has generated furore, it was a good starting point.
He said: “When people speak about percentage, they forget to talk about the basics. The question to ask is: three per cent of what? For example, if it is three per cent of profit, it is different from three per cent of the Capital Cost (Capex) and different from Operational Cost (Opex). So, if is three per cent of profit, it means that any year there is no profit, it means there will be no three per cent. But in this case, the National Assembly is talking about three per cent of operating expenditure.
That means the three per cent is relatively constant. So, judging where we are coming from, is the three per cent okay? To me, the National Assembly could have done better to a minimum of five per cent. But looking at where we are coming from, it was zero per cent before now, now it is at three per cent. For us in PENGASSAN, three per cent of operating expenditure is a good place to start. Let the bill be signed to end the uncertainty that shrouded the petroleum industry. The host communities can then seek amendment.”
He added that with about $45 million that the three per cent would translate to, efficient utilisation of the fund would register positive impacts in the lives of the Niger Delta region.
Osifo also revealed that while PENGASSAN has never advocated for the refineries to be sold, it insists on adopting the Public-Private Partnership in the running of the nation’s refineries.
“Why is the Federal Government not exploring the possibility of adopting the LNG model where government holds minority 49 per cent while the private sector will take 51 per cent? That model has worked very well. PENGASSAN welcomes the rehabilitation of the refineries,” he said.
Osifo, who confirmed the participation of PENGASSAN in the refurbishment of the refineries as a member of the committee, said the fund for the rehabilitation would be in an escrow account and would only be made available to the contractors handling the project.
He explained: “The Afri-Exim Bank is a reputable institution that will not involve itself in any shady deal. The United States of America has the highest stake in the bank. Indeed, I can also confirm that money will be released by milestone. No government official will have access to the fund.”
He also said PENGASSAN opted against selling the refineries as scraps, saying the association insisted that they should be rehabilitated and offered to the private sector.
Osifo stressed that while PENGASSAN was not opposed to deregulation as a policy, it would not support a deregulation policy hinged on importation.
“That is why our position to support the rehabilitation of the refineries is justified. Nigeria will be ripe for a full deregulation when the three refineries in the country are fully rehabilitated and are functioning under the private sector that is efficient. With the refineries coming on stream in the next few months and with the Dangote Refinery coming on board as well, Nigeria will soon be self-sufficient in refined petroleum products,” he said.
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