Key Elements of The 2017 National Petroleum Policy

Petroleum product pricing is intended to be market-led and end user prices expected to be unregulated as envisaged in the NPP. However, to avoid information asymmetry and arbitrage, end user prices will be published and prices will be monitored. Further, it is intended that all subsidies will be eventually permanently removed. A transitional arrangement to a fully price-deregulated product market is intended to be developed and implemented.

  • Local Content and Communications
    The NPP advocates the building of in-country capacity in the petroleum industry through development of national human resources capable of taking a full role in managing the resources within the Nigerian oil and gas sector. It is intended that full compliance with the provisions of the Nigerian Oil and Gas Industry Content Development Act, 2010 (“Local Content Act”) coupled with qualitative national education and training will be diligently pursued, so as to engender the acquisition by Nigerians of the requisite leadership, management, engineering, and technical skills for operations along the petroleum industry value chain.

    An effective communications strategy is proposed in the NPP to be developed as a means of explaining to all stakeholders the purpose of the petroleum policy, and the thinking and analysis behind it. There exists a gulf and lack of understanding between investors and government of their respective expectations and obligations under the new vision of transforming Nigeria from being an oil enclave into a gas-based industrial hub. A two-channel strategy of internal and external communications is therefore proposed. The NPP will be explained within the MPR and all government ministries, departments and agencies (MDAs) through the internal communications channel while the external communications channel will be employed in explaining the policy to, and consulting with, industry stakeholders including international investors; domestic investors; civil society; donor community; and the general public.

  • CONCLUDING REMARKS

    Notwithstanding the laudable reforms envisaged by the NPP, industry reaction is likely to be one of cautious optimism, since the policy has emerged in the wake of a crash in crude oil prices and a general migration from dependence on fossil fuels towards renewable energy sources, on the international scene.

    For the theoretical agenda and benefits of the NPP to be effectively realised, certain practical steps must be timeously taken. For instance, the National Assembly’s enactment of the PIRB into law is critical in order to provide the necessary legislative backing for the objectives of the NPP.

    Also, whilst it is commendable that critical policy milestones are set in the NPP, under the roadmap for action within the short term (one year and below), medium term (one to two years), and the long term (two years and above); we note that the timelines set for attainment of the specific objectives should be considered sacrosanct so as to engender investor confidence in the entire process. To facilitate this, we advocate periodic review of progress made in the implementation of the NPP, in addition to other practical demonstrations of commitment on the part of Government to attainment of the objectives of the policy.

     

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    DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/attorney relationship between readers and our Law Firm. Specialist legal advice should be sought about the readers’ specific circumstances when they arise. 

     


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