Succour will soon come the way of oil-producing communities in Nigeria, as the newly drafted Petroleum Industry Bill (PIB), provides for the establishment of Petroleum Host Communities Fund (PHCF) to be utilised for the development of the economic and social infrastructure of the communities.
The latest draft PIB, if passed into law, shall mandate each upstream petroleum company to remit on a monthly basis 10 per cent of the net profit derived from petroleum operations in onshore areas and in the offshore shallow water areas directly into the PHCF
It was however provided that where an act of vandalism, sabotage or other civil unrest occurs that causes damage to the upstream facilities allocated to a community, such community shall forfeit its entitlement to the portion of the PHCF for repair and remediation of the damage.
A copy of the draft bill obtained by THISDAY defined the net profit as the profit minus the Nigerian hydrocarbon tax and minus the corporate income tax.
The bill also provides that profit derived from petroleum operations in deepwater areas shall be remitted directly in equal shares to each state governments of the eight littoral states of the Federation.
Each upstream petroleum company, under the yet –to-be passed bill will be required to at the end of the fiscal year, shall reconcile its remittance as provided, with its actual filed tax return to the service and settle any such difference.
It was further provided that contributions made by each upstream petroleum company will constitute an immediate credit to its total fiscal rent obligations as defined in the Act.
The Federal Government had in 2010 stated the condition for oil communities to enjoy the proposed 10 per cent equity in the PIB was for them to ensure safety of oil installations in their areas.
Former Special Adviser to the President on Petroleum Matters, Dr. Emmanuel Egbogah, had noted that the introduction of the 10 per cent profit from oil revenue to host communities, was an incentive for them to protect oil installations.
President Goodluck Jonathan had about a fortnight ago disclosed that the latest draft of the bill put together by the PIB taskforce will be submitted to the National Assembly in June.
The task was set up in January by the Petroleum Minister, Mrs. Diezani Alison-Madueke, to fast-track a consolidated version of the PIB with a view to ensuring its speedy passage. Thsidaylive news