Nigeria seeks to regulate activities of oil sector

The speaker of the House of Representatives, Alhaji Aminu Bello Masari, has proposed the establishment of a "Refineries and Products Regulatory (Establishment) Commission" to regulate activities of the oil sector in the country. The proposed body is to grant licenses to refineries as well as take over settlement of disputes in the oil sector.
A bill containing the proposal, which has been gazetted in the House of Representatives, also seeks to provide for a $ 5 subsidy per barrel of oil to be used locally as a way of cushioning the effect of any fluctuations in the global price of oil.

Part of the powers proposed by Masari for the new Commission include the regulation of prices to ensure that there was no excessive profiteering by companies and individuals operating in the oil sector. Violators of the Commission's regulations would be liable to fines or jail terms or both.
The Bill, which has been slated for debate, is seeking for the establishment of refineries in all the six geo-political regions of the country. It also seeks the suspension of grant of licenses for any refinery to be built in the country until the completion of construction on the local refineries.

Section 8 (1)(2) and (3) of the proposed legislation provides that "where the price of crude oil sells at $ 25 at the International market, the Federal Government shall sell to local refineries at less $ 5 per barrel."
Section 8 (2) states that "the differential of $ 5 shall be maintained at any other price but not below $ 25."
Section 8(3) also states that "Notwithstanding the provision of subsections (1) and (2) of this section, crude oil and other petroleum products for export are excluded from this concession".

The proposed law provides in section 9 that export of crude oil and other petroleum products to neighbouring African countries shall be through pipelines. Authorization of companies to deal in oil products shall be made by the commission, which has six months to process such licenses if the applicant complies with laid down procedures.
Sections 29 to 32 of the proposed law provides for offences and punishment where violators are to be fined or jailed depending on the offence for sums ranging from N 50,000 to N 100,000. The jail term is also between two and five years.
Section 29 reads, "Any person who violates the directives, orders, decisions or awards of the Commission or any arbitral panel set up by the commission shall be liable to a fine of N 50,000 for each day the violation continues and N 100,000 for subsequent or continuing violation".

Section 30 reads, "Any company engaged in refining, processing, transmitting, marketing, distributing or operating any petroleum or gas processing or transmitting plant, terminal or device without a valid authorization by the Commission commits an offence and is liable on conviction to a fine of N 10,000,000 and N 5,000,000 for each day the violation continues".
Under section 31 of the proposed law, "Any person, staff, official promoter, entrepreneur, proprietor, sponsor or investor who operates a company in accordance with the provisions of this Act, commits an offence and is liable on conviction to imprisonment for 2 years and a fine of N 5,000,000."
It also prescribes a jail term of five years or a fine of N 5 mm or both for pipeline vandals in section 32 of the Bill.