The Nigeria Senate is reviewing oil industry Production Sharing Contract (PSC) and the motion was moved by Senator Ifeanyi Uba, a major player in the petroleum sector. Senator Uba called for the attention of the Senate to the huge losses amounting to N7 trillion which Nigeria has suffered because of the failure of parliament and the Federal Government to review PSC Act.
PSC is a contractual arrangement for petroleum exploration and production whereby the state as owner of petroleum resources engages a contractor to provide technical and financial services for exploration and production operation for an agreed share in profit after payment of royalty cost and task oil. Section 16 of the PSC Act stipulates that when price of crude oil exceeds $20 per barrel, the Act will be reviewed to ensure that the share of Federal Government in the additional revenue is adjusted to an extent that PSCs shall be economical beneficial to the Federal Government.
Senator Uba disclosed that “Senate knows that Nigeria having lost trillions of naira due to non-review of the PSC Act stands to gain an additional sum of N30 billion monthly, and N360 billion annually if the Act is reviewed and amended which will boost our revenue base significantly.”
According to the senators, the slight cost the country trillions of naira because failure to review the Act every fifteen years as stipulated in the legislation has cost Nigeria to also lose N350 billion to fund the 2019 budget.
Senator Gabriel Suswan made it known in the floor of the Senate that “In this year the Federal Government approves N160 billion, if the Act is not amended for us to access this money, it means that the budget deficit that we are going to get in 2020 will be beyond the 3% threshold as provided by the fiscal responsibility Act. And so, it is very important for us to pass this motion so that we will be able to access the N160 billion.”
On his part, Senator Opeyemi Bamidele was of the view that “It is important that we as a Senate will develop a political will and come to a conclusion that it is not going to be another motion, that, it is now that we are going to do something about this to save this country.”
Meanwhile, the bill for the amendment into the PSC Act is expected to be before the Senate on.
The Senate President, Ahmed Lawan promises that it will be given prompt passage in order to save the country huge losses accrued to the country.