BREAKING!!! Petroleum Industry Bill: Kano, Kaduna, Gombe Listed As Host Communities, To Share From Funds

The new Petroleum Industry Bill (PIB) before the House of Representatives has expanded the concept of host communities to include some non-oil states.

The Bill, read for the second time yesterday, provides that state where there is a refinery, petroleum depot or where pipeline passes through will draw from the host communities’ funds.

According to the NNPC, Nigeria has 5000 kilometres of pipeline network and twenty-one (21) storage depots. Independent marketers account for over 83 depots spread across the country.

The pipeline networks (depending on the product they are conveying) crisscross states in the West mostly Lagos and South Warri, Port Harcourt, East Aba, Owerri down to the North, Kaduna, Kano and Gombe.

The House yesterday passed three different bills on the petroleum industry for second reading including the Senate version already passed by the upper chamber last month.


Although some lawmakers picked holes in the bill, they allowed it pass for second reading for stakeholders to contribute their quota during public hearing.

The bill provides that the benefits to be derived by non-oil communities will be less than those for communities where oil exploration and production take place.

The bill is titled: ‘A Bill for an Act to provide for a framework relating to Petroleum Host Community’s participation, cost and benefit sharing amongst the government, petroleum exploration companies and petroleum host communities and for related matters.’

Leading debate on the Bill, Rep Joseph Akinlaja (PDP, Ondo), said the draft law provides that there should be a Petroleum Communities Trust Fund as a corporate body for each local government hosting upstream facilities to manage the monies received as payment for hosting petroleum operations.

He said there shall be a board for the fund and that 0.5 percent of the fund would be allocated to local government councils in the affected communities.

He said the federal government shall pay to each fund the following monies: 10 percent of the total amount payable to a state government from its derivation revenue and 20 percent of an aggregate of the total royalties accruing to the federal government to be evenly distributed by all concerned local governments.

Other monies to be paid by the federal government are 50 percent of government receipt from levies for pipelines payable to host communities hosting such pipelines and