PIB: 3% Allocation Not Ideal Compensation For Host Communities, Says Rewane

Economist Bismarck Rewane has faulted the three percent allocated for oil-producing communities in the just-assented Petroleum Industry Bill 2021, saying it is not the ideal compensation.

The Senate and House of Representatives had passed the PIB on July 15 and 16 respectively with President Muhammadu Buhari signing the document a month after.

“Is the three percent the ideal, optimal compensation for the host communities? I will say, ‘No’ because I come from there but at the same time, what is more, important for the oil communities is the transparency of the money that is spent and the impact it has rather than having a tea party,” Rewane, the Managing Director of Financial Derivatives Company Limited, said during an interview on Channels Television’s Politics Today on Monday.

READ ALSO: PIB: 3% Too Small For Those Who Suffer Burden Of Producing Oil, Says Oyebode

In the bill, host communities in the Niger Delta are expected to benefit from three percent of 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.

However, some southern leaders had advocated for the percentage to be increased.