Reps okay bill to block revenue leakages in oil sector
.As FG loses $8 million daily
By Joel ThankGod (Financial Business, Abuja)
In a bid to curtail revenue losses in the oil sector of the economy, the House of Representatives yesterday passed a bill seeking to help plug revenue leakages on government’s income streams.
The bill passed for second reading in the House followed a motion moved by Deputy Majority Leader, Ahmed Wase, at the plenary session, which was presided over by Speaker Yakubu Dogara.
He revealed that the Federal Government loses about $8million daily, and has lost a huge sum of $21 billion since 2008 fiscal year, following lack of amendment of the Act.
He stressed that a bill to amend the Deep Offshore and Inland Basin Production Sharing Contracts Act, 1999, would ensure accurate method of computing income accruable to government from this source.
According to him, “The bill seeks to effect amendment in the Principal Act (Deep Offshore and Inland Basin Production Sharing Contracts Act, 1999), in order to plug leakages in government revenue streams.
“This would ensure that government maximises sufficient royalties coming from Production Sharing Contracts, PSC, between Nigerian National Petroleum Corporation, NNPC and International Oil Companies,IOCs.
“PSC was widely introduced in 1993 to address issues faced by the Joint Operating Agreement, JOA between NNPC and IOCs, in order to provide a suitable agreement structure for encouraging foreign investment offshore”.
He pointed out, “Under these arrangements, NNPC is the holder of the concession and IOC is the contractor”.
He said that additional revenue from this source can be used to fund budget deficit and boost the economy to improve the standard of living for the citizens.
His words, “It would improve revenue generation for government, in order to improve the petroleum industry governance as well”.