The PIA Bill What Is Its Long-Term Effect on Nigeria’s Economy and Energy Industry

The petroleum industry act 2021 establishes the legal, governance, regulatory/budgetary framework for the Nigerian Petroleum Industry and also the development of host communities.

As an independent company, NNPC Limited will have to stop selling petroleum products below cost-recovery prices. In November 2021, the Nigerian National Petroleum Corporation reported to the federation account allocation committee that it spent N864.07 billion cushioning fuel prices between January and September 2021.

According to the PIA 2021, the federal government will eliminate gasoline subsidies by 2022. The poorest 40 million Nigerians would get a monthly N5,000 transportation allowance. The NNPC group managing director said the petrol subsidy will likely stop in February 2022.

The PIA offers more goodies for Nigerians by capturing, processing, and using the country's plentiful natural gas for cooking, autogas, thermal power generation, fertilizer manufacture, and foreign exchange for the leading African energy giant. The Ajaoukuta-Kaduna-Kano (AKK) gas pipeline project promotes gas use.

The PIA can improve security in oil-producing regions. Three percent of oil firms' operations budgets—at least $500 million annually—will go to host communities to fund their development initiatives, bringing peace and progress to the Niger Delta.

The PIA also promises Nigerians a way to fix oil spill damage. Its focus on immediate restoration and stricter gas flaring penalties will slow environmental degradation and safeguard maritime livelihoods. For environmental reasons, Nigeria will stop gas flaring by 2030.

President Muhammadu Buhari's August 16, 2021 petroleum industry legislation was well received by Nigerians. Chibunna Ubawuike, chairman of the Imo state chapter of the Oil Mineral Producing Areas Landlords Association of Nigeria (OMPALAN), praised the president for signing the measure into law.

“I appreciate President Buhari for quickly approving the PIB after 16 years of stagnation. The president's political resolve in signing the measure is rare.”

Chibunna claimed the measure will stop Niger Delta unrest. The Niger Delta Development Commission, the provision of 13% of crude oil earnings to the nine Niger Delta oil states, the amnesty program for repentant militants, and the founding of the Ministry of Niger Delta Affairs were initiatives to stop hostilities and restiveness in the oil-bearing states.

Mele Kyari, the NNPC group managing director, stated that the new NNPC Limited's royalties and taxes will be distributed among the country's six geopolitical zones, the federal capital area, and all tiers of government.

“Simple. This corporation will pay federation taxes and royalties. Therefore every region of this country and every subnational institution or government would profit," he said.

After two years in charge, the NNPC chairman has overseen various transformational efforts. He eliminated wasteful spending and helped the corporation declare its first profit of N287 billion in its 44-year history by improving transparency and accountability. Due to the PIA, the new NNPC Limited will earn more each year.