Oil Communities to Get $500m Annually Under New PIA

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*Fuel Prices to go up soon
Oil producing communities in the Niger Delta under the new Petroleum Industry Act which has been signed by President Mohammadu Buhari will get as much as $500 million annually.
This was disclosed by the Group Managing Director of the Nigerian National Petroleum Corporation (NNPC), Mallam Mele Kyari, when he spoke to Arise Television, Thisday’s broadcast arm.
Kyari said the three percent payment of oil companies operating expenses approved under the new PIA could be bigger than what the oil communities get from the Niger Delta Development Commission (NDDC).
He also noted that the new PIA ensures that the oil communities control their funds and projects as against before when they could not determine what projects would be located in their areas under NDDC.
Kyari added that the signing of the new law brings a lot of transformation in which the NNPC would operate under the Company and Allied Matters Act (CAMA).
He told Arise TV, “And three per cent of your operating expenditure is a huge number. Many people argue around whether it should be 10 per cent or five per cent or three per cent. But percentage of what? I think that’s what most people don’t understand today.

“Last year’s operating expenses for the year was about $16 billion. Three per cent of $16 billion is a large number, somewhere around $500 million plus. That’s because in today’s context, it is probably bigger than the NDDC. That’s really what it is. That’s what you’re providing.
“The meaning of this is that this company will just be another privately-owned company in a sense, this company will pay taxes, this company will pay royalties, and this company will deliver dividend to its shareholders. This isn’t the situation today, because the corporation has no such obligation today.
“What this bill will do now is that in the very short term, within the framework of the petroleum industry act, within six months a new company will be incorporated. That means all liabilities and assets of this company will be transferred to the new company, not all of them.
“By the way, the bill is also very clear that some toxic assets of the corporation would no longer would be with the corporation, but the shareholders can decide to keep some of the assets and leave some within the corporation.”
There is also the likelihood that the signed PIA will translate to removal of fuel subsidy.
If this happens life may be more miserable for the low income earners as prices of goods and services will go up.