The Senate on Thursday adopted a three percent allocation to host communities in the Petroleum Industry Bill, despite protests by southern lawmakers at the National Assembly.
The southern lawmakers had demanded for five percent for host communities.
The number in dispute is the percentage of their total operating expenses (OPEX) oil companies are expected to contribute to a trust fund created for host communities.
On Thursday, two southern senators George Sekibo and Seriake Dickson raised concerns over the approval.
Senator Sekibo said he is not part of the vote on the allocation clause and Senator Dickson said his privilege had been breached as his views were not accommodated.
However, Senate President Ahmad Lawan replied that the Senate had taken a resolution on the matter and could not go back on its decision.
Trust fund
The host community allocation was one of the clauses left in consideration after the National Assembly passed the PIB earlier this month.
The PIB is expected to transform Nigeria’s oil industry.
The three percent is different from the 13 percent derivation fund which is paid to oil-producing communities from the federation account.
Instead, the three percent allocation will come from an entity’s actual yearly operating expenditure of the preceding financial year in the upstream, midstream and downstream sectors.
All contributions will be deposited in a trust fund for host communities.
According to a draft of the PIB, the trust fund will enhance peace and cordial relationship between oil companies and host communities. (Channels TV)
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