Shock Value

Shock Value

The Nigerian economy, like any other, experiences “shocks”— events or policy decisions that can send a ripple of changes through the system. This column zooms in on these ripples in a range of sectors to explore how and why these shocks matter.

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Should the Petroleum Equalisation Fund Exist?

Ebehi Iyoha

Ebehi Iyoha

Ebehi is an avid reader seeking insights in unexpected places. Her research interests include economic development, political economy and trade.

When the Senate passed the Petroleum Industry Governance Bill (PIGB) in May, there was a lot of fanfare over what appeared to be a tangible step in reforming the oil & gas sector. Understandably so, as legislative attempts at reform have spanned four presidencies and nearly two decades. However, it is important to remember that the PIGB is just one of 5 bills created from what was initially a single comprehensive Petroleum Industry Bill (PIB) and it primarily deals with the broad strokes of the regulatory agencies and government entities that will operate in the sector.

Furthermore, while one of the stated objectives of the 2012 draft PIB was to "deregulate and liberalise the downstream petroleum sector", the PIGB may not be geared towards the same goals. In particular, section 4 of the PIGB provides for the establishment of the Petroleum Equalisation Fund (PEF) to replace the one that currently exists. The proposed PEF should be an upgrade in terms of administration and efficiency, but given the stated ambitions of the original PIB, it is worth asking: is the PEF compatible with a liberalised petroleum sector?

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