National Assembly has scrapped the Petroleum Equalization Fund (PEF) and Petroleum Products Pricing Regulatory Agency (PPPRA) in a new Petroleum Industry Bill (PIB) passed on Thursday.
The lawmakers also approved the commercialisation of the Nigerian National Petroleum Corporation (NNPC).
The law mandates the Petroleum Minister to incorporate a limited liability company, to be known as NNPC Limited, six months after the commencement of the act.
The Senate passed the bill after a clause-by-clause consideration of a report by the Joint Committee on Downstream Petroleum Sector, Petroleum Resources (Upstream), and Gas on the PIB.
Subsequently, the House of Representatives also considered and adopted the report on the PIB the same day.
The new law consists of five chapters, comprising 319 clauses and 8 schedules. The chapters are: Governance and Institutions, Administration, Host Communities Development, Petroleum Industry Fiscal Framework, and Miscellaneous Provisions.
The petroleum minister was also mandated at the incorporation of NNPC Limited, to consult with the minister of finance to determine the number and nominal value of the shares to be allotted, which would form the initial paid-up share capital of NNPC Limited.
Thirty percent of NNPC Limited’s oil and gas profit in the production sharing, profit sharing and risk service contracts shall be used to fund the exploration of frontier basins.
The law provides that three percent of operating expenditure of oil companies (OPEX), estimated at $500 million annually, be paid as contribution to the Host Community Development Fund.
