Oil companies operating in Nigeria will now remit monthly 7.5% of their net profits to their host communities via the Petroleum Host Community Fund, PHCF.
The PHCF is a pool of fund which will be made accessible to every oil-producing communities in Nigeria and will be used for developmental projects in such areas.
This was one of the major highlights at the resumed consideration of the Petroleum Industry Bill, PIB in the House of Representatives, yesterday.
The House adopted the recommendation in Clause 118 that instead of the original 10 percent going into the community fund, it should be slashed to 7.5 percent due to the increasing number of communities which will benefit. The clause is specifically on “Beneficial Entitlements to the Communities.”
Hon. Leo Ogor had argued that there were too many technicalities in the bill, insisting that the original bill should be retained.
The original bill in Clause 118 read thus: “Every upstream petroleum-producing company shall remit on a monthly basis 10 percent to the host community.”
But Chairman of the Ad-hoc Committee, Hon. Ishaka Bawa, explained that virtually every state in the country now has oil, excluding Sokoto and Kebbi states.
He maintained that the proposed 7.5 percent was ideal because more communities will now benefit from the fund.
The proposed amendment read thus: “Every company involved in the upstream or downstream petroleum operations or both shall remit 7.5 percent on a monthly basis impact funding amounts to the PHC fund based on the regulations pursuant to Paragraph (f) of Section 121 of this Act.”
At the Committee of the Whole, the lawmakers amended some of the clauses and expressly approved others.
For instance, clauses 10, 43, 48, 52, 53, 62, 75 and 118 were amended, while clauses 33-42, 44-47, 49-51 and 54-61 were retained as proposed by the committee.
The PIB report is a 368-page document with 312 sections and 314 clauses.
On Wednesday, the lawmakers stopped at Clause 6 (Functions and Powers of the Minister) and continued from Clause 7 (Right of Pre-emption) yesterday.
The House began the clause-by-clause consideration on Wednesday but could not make any headway due to some technicalities.
Giving an insight into the report, Bawa had said the committee recommended the removal of Section 191 of the bill, which gave the President discretionary powers to grant petroleum licenses.
The lawmaker also hinted that 80 percent of the power given to the Minister of Petroleum Resources in the original bill had been removed.
He said the committee scrutinised 363 sections and annexure of the original bill and made some amendments and recommendations.
He pointed out that the public hearings conducted by the 23-member ad-hoc committee in all the geo-political zones provided opportunities for stakeholders to make their contributions to the bill.
Clause 2, which focuses on “Ownership of Petroleum Resources” was stepped down on Wednesday due to some technicalities and was referred to the Committee on Rules and Business to look into it and advice the House accordingly.
Speaking on its recommendation yesterday, Chairman of the Committee, Hon. Albert Sam Tsokwa, cited similar cases and advised that the clause be deleted.
But rather than deleting it, Bawa re-phrased the clause to read thus: “The Ownership of Oil Blocs as Prescribed by the Constitution.”
The consideration of the report continues on Tuesday next week.

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