AN ANALYSIS OF THE EFFICACY OF FISCAL LAWS RELATING TO PETROLEUM OPERATIONS IN NIGERIA
AN ANALYSIS OF THE EFFICACY OF FISCAL LAWS RELATING TO PETROLEUM OPERATIONS IN NIGERIA
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Date
2011-06
Authors
TANKO, ASHANG
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Abstract
Petroleum has become the number one resource in the world because of its
universality. All other resources are demanded in varying scales, but not petroleum.
However the catch is that while demand increases, existing production of this pearl
declines. In Nigeria, the problem appears to be a double-edged sword. Declining
production and the apparently doubted efficacy, and confused state, of the fiscal laws
relating to petroleum operations in the country remain intractable problems which
the government is grappling with. This calls for a re-examination of fiscal policy.
Thus taxation is an inherent element of fiscal policy. The petroleum industry as a
major revenue earner for the government is not immune from this inherent element.
However, concerns surround the efficacy of the fiscal law relating to petroleum
operations having regard to the hackneyed calls for, and untiring efforts at
discovering, cheaper alternative sources of energy, in a world whose economic
activities are now unleashing backlash effects in the form of ozone layer depletion,
global warming and other environmental concerns. More than this fear however, the
government itself recognizes that something is wrong somewhere regarding the
beneficial effects or rewards of petroleum to the Nigerian people, having decried the
porosity of the fiscal regime relative to the petroleum sector.
Yet the fiscal regime of petroleum operations in Nigeria appear to be ‘very strong’
when viewed against the backdrop of plethora of legislation specific to this area. The
PPTA, the CITA, the PSC Act and the Incentives Act, apart from other related
legislation which have elements of fiscal policy, are principal legislation here.
Natural with man to find walk around for impediments, it would appear that some of
these legislation are hew in such a way that it amounted to emasculating the
Nigerian economy, sabotaging the rights of the Nigerian people to development and
impeding economic independence of the nation, so that, on account of the latter, the
economic structure of the country is perpetually neo-colonialist. Aware of these
dangers, the government embarked on a reform agenda of petroleum operations in
Nigeria, propped by the well conceived Petroleum Industry Bill (PIB) 2008.
With the passage of the FIRS (Establishment) Act 2007, the stage appears set for
marked improvement in the revenue to be generated from this prime economic
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resource. The Act and the PIB 2008 (if eventually passed into law) will undoubtedly
concatenate to deliver a measure of transparency, responsibility and accountability
with respect to fiscal regime governing this sector. But this is as far as administrative
and legal framework is concerned. Sadly, in a desperate bid to save the system, the
government adopts carrot-and-stick measures. In the alternative, what is needed,
among others, is a responsible political system where infrastructural facilities are not
epileptic or waning, where energy supply (in terms of power) is steady and stable,
where security of lives and property is not a daydreaming fantasy and where good
governance framework is the avowed commitment of the government. These are the
key elements of realizing and sustaining the efficacy of the fiscal regime attending to
petroleum operations in Nigeria.
Description
A THESIS SUBMITTED TO THE POSTGRADUATE
SCHOOL OF AHMADU BELLO UNIVERSITY, ZARIA,
NIGERIA
IN PARTIAL FULFILLMENT OF THE REQUIREMENTS FOR
THE AWARD OF THE DEGREE OF MASTER OF LAWS -
LL.M.
DEPARTMENT OF COMMERCIAL LAW
FACULTY OF LAW
AHMADU BELLO UNIVERSITY
ZARIA, NIGERIA
JUNE 2011
Keywords
ANALYSIS,, EFFICACY,, FISCAL LAWS,, RELATING, PETROLEUM,, OPERATIONS,, NIGERIA