President Muhammadu Buhari wants sections of the Petroleum Industry Governance Bill (PIGB) that contradict with the Fiscal Responsibility Act (FRA) 2007 amended before he could give his assent, presidential aide on National Assembly Matters, Ita Enang, has said.
Mr Enang said the president’s concerns were anchored on four major issues, two of which bordered on Sections 26 and 36 of the proposed petroleum industry law relating to revenue allocations to two agencies, the Petroleum Regulatory Commission (PRC) and Petroleum Equalisation Fund (PEF).
PRC will take over the regulatory functions of the current Department of Petroleum Resources (DPR) under the new PIGB regime, while PEF is the agency responsible for ensuring economic balance in the pricing of petroleum products in all regions of the federation.
Controversial Withholding Of Assent
Last week, reports emerged that the President had returned the draft PIGB to the National Assembly after withholding his assent.
The president, it was learnt, had reservations about some provisions in the harmonised draft of the proposed petroleum industry governance law sent to him by the Senate on June 8, 2018.
There were media reports that the president’s refusal to assent to the document stemmed from the fear that his powers to control the petroleum industry as Minister of Petroleum Resources would be whittled down and transferred to the PRC. The president allegedly withheld his assent after not seeing any “Fiscal content” in the draft document, apparently suggesting he was unaware all issues on fiscal terms were captured under the draft Petroleum Industry Fiscal Bill (PIFB).
The PIFB is one of the other three draft sections of the PIB currently pending consideration by the National Assembly.
The others are the Petroleum Industry Administration Bill (PIAB) and the Petroleum Host and Impacted Communities Bill (PHICB).
Withholding Assent, National Interest
However, Mr Enang told PREMIUM TIMES the reasons adduced for the president withholding assent to the bill was an attempt to distort the facts and blackmail the executive.
“None of the reasons for withholding assent by Mr President adduced by the media is true,” Mr Enang said. Rather, he said it was for constitutional and legal reasons.
Rather than fear about his powers being threatened, Mr Enang said the president’s decision to withhold assent to the bill was more in the national interest, not only for the federal, but also for the other tiers of government.
“The president is saying if allocation to the PRC and PEF are adjusted to a reasonable level, the three tiers of government will have more revenues available to fund their annual budgets.
“The revenue from the petroleum sector accounts for about 70 or 80 per cent of the entire earnings that fund the country’s budget. If it were for selfish reasons, the president would have overlooked it, as allocations to the PRC and PEF belong to the federal government he is in charge of,” he noted.
The draft PIGB proposes allocation to the PRC of 10 per cent of all revenues collected on behalf of the federation from petroleum industry activities in addition to its regular allocation in the annual budget and other sources of funding.
Other sources of funding for the PRC include fees for services rendered to non-petroleum producing and service companies; income derived from publications; grants; loans, grant-in-aid or grants of land from communities.
Similarly, the draft PIGB also provides for revenue realised from a five per cent levy on all fuels sold and distributed in Nigeria to be allocated to the PEF.
Mr Enang said the president considered allocations to the two agencies as “unduly high, given that whatever revenues they make belongs to the three tiers of government – federal, states local and Federal Capital Territory (FCT), Abuja.”
“The president is saying, it is inadvisable for such a high percentage of revenue (15 per cent) to be allocated to the PRC and PEF alone, considering there are other sources of funding for them.
“If the bill is passed as it is, the two agencies will have too much money and not much will be left for the three tiers of government to share.
“No agency of the federal government should be made to behave as if it were the supervisor or the owner of the federal government itself,” he said.
Mr Enang drew attention to the provisions of the FRA, which stipulates how monies should be managed by agencies of government.
Under the Act, all government agencies are allowed to retain a maximum of 20 per cent of revenues they generate, while transferring 80 per cent to the Consolidated Revenue Fund Account.
The presidential aide said the president was concerned the proposed allocations to PRC and PEF would contradict the provisions of the FRA relating to generation and spending of funds by government agencies.
At the moment, the Federal Inland Revenue Service (FIRS), Nigeria Customs Service (NCS) and DPR are allowed to retain between 4 and 7 per cent of revenues they generate as cost of collection.
“The FRA has stated that the provisions of any law that is inconsistent with its provisions shall to the extent of that inconsistency be void.
“The question the National Assembly should answer is: Can any agency, or any other provision in any law, after the coming into effect of the FRA 2007, be made to be collect any revenue contrary to the provisions of the FRA without, specifically, exempting the provisions of the FRA? Any revenues outside the provisions of the FRA should be amended,” Mr Enang said.
Describing as unnecessary the controversy that followed the leaked communication by the president to the National Assembly on the issue, Mr Enang said if the Senate was not on vacation, “the contentious issues could have been thrashed out before the public became aware”.
“The decision to withhold assent was communicated by the p resident to the leaderships of the National Assembly on July 29 when they were already on vacation. That’s why the public did not notice until the information was leaked. Otherwise, it could have been resolved through the normal channels usually open to for executive-legislature interaction on such issues,” he said.