The Lagos Chamber of Commerce and Industry (LCCI) has urged the government to engage relevant stakeholders in the oil and gas sector to arrive at an inclusive deregulation policy.
The Chamber made the call following the Petroleum Industry Act (PIA) 2021 signed by President Muhammadu Buhari. The Director General, Chinyere Almona, in a statement noted that inclusive implementation of the PIA will create a competitive business environment where all investors can thrive.
She said the Chamber has always advocated a fully deregulated downstream sector of the oil and gas industry and a level playing field where market forces are allowed to allocate resources through cost-reflective pricing.
Almona however, advised that the Act should be implemented with a focus on the areas of business regulations that make up the indicators of the Ease of Doing Business Ranking by the World Bank.
“Particularly, we need to do better with enforcing contracts within the oil and gas industry.”
Commending the commitment shown so far by the Federal Government in its appointment of a steering committee to drive the implementation of this Act, the chamber urged the Presidency, Ministry of Petroleum Resources, and other institutions, to put in place a robust mechanism and roadmap, with due consultation with private sector operators and other stakeholders to drive effective and efficient implementation.
The Chamber further recommended awareness through public enlightenment about the three percent revenue allocation to host communities to forestall a misunderstanding of government’s intentions and raise tensions in the oil-producing region.
“Beyond the enlightenment, there should also be a monitoring mechanism to ensure that the allocated funds are judiciously used for the development of the host communities.
“The Government should be firm and clear in their communications about the removal of oil subsidies or otherwise. Policy statements influence business decisions. The divergent statements by different government officials on the removal of oil subsidies create uncertainty. This is unhealthy and not standard practice for a sector that hosts billions of dollars of investment.