PIA: Oil firm’s equities belong to three tiers, FG assures states
The Federal Government on Thursday said the new Petroleum Industry Act had given it the power to hold the equities of the country’s oil firm in trust for the federation.
It stated this in response to concerns raised by state governors on the ownership of the Nigerian National Petroleum Corporation, which was transformed to the Nigerian National Petroleum Act.
The governors had argued that the new oil sector would deny states their fair share of revenue accruing to the Federation Account because it favoured the Federal Government and the NNPC Limited.
They expressed concerns about the provision for the incorporation for the NNPC Limited under the Companies and Allied Matters Act, stressing that rather than reforming the sector, the Act had made the successor firm to the NNPC a more powerful oil company.
The governors also faulted the removal of the requirement to transfer funds generated by the NNPC to the Federation Account, describing it as unconstitutional.
Reacting to the grievances of the governors in Abuja on Thursday after inaugurating the committee for the implementation of the PIA, the Minister of State for Petroleum Resources, Chief Timipre Sylva, said the Federal Government would not hold the NNPC in trust for Nigeria.
“The federal government is also holding the equity in trust for the federation in the NLNG (Nigeria Liquified Natural Gas Company). There are a lot of other examples i can give so this is not the first time it is happening.
“And so, if the federal government holds the equity in trust for the federation, it means that it is holding it in trust for the states and for the local governments and by extension, for the communities. That is what the federal government is doing.
In the PIA, which the President, Muhammadu Buhari, directed the committee to implement by 2022, the transformation of the NNPC from a corporation into a limited liability company.
Sylva, also on Thursday announced the constitution of the nine-man PIA implementation committee which has seven of its members from the North and two from the South.
The minister said he would serve as the chairman of the committee while representatives of the Finance and Justice ministries and the Federal Inland Revenue Service, among others would serve on the panel.