The Host Communities Producing Oil and Gas have expressed grave concern over the lack of benefits reaching the host communities in the Niger Delta, despite the stipulated provision in the Petroleum Industry Act 2021. The Act, in effect for two years, mandated that three percent of oil companies’ operational costs be directed to these communities, a provision yet to materialize.
During a press briefing in Yenagoa, Bayelsa State, the National President of HOSTCOM, Benjamin Tamaramiebi, addressed media reports suggesting a resistance from host communities regarding the involvement of the Nigerian Upstream Petroleum Regulatory Commission in managing the trust fund.
Former President Muhammadu Buhari signed the Petroleum Industry Bill into law in August 2021, establishing legal and regulatory frameworks for the Nigerian petroleum industry, including the development of host communities.
The host community trust fund, a creation of the PIA, was designed for joint administration by oil and gas companies in collaboration with the affected communities. Tamaramiebi lamented the failure of oil firms operating in the Niger Delta to remit the prescribed three percent of their annual production costs to this trust fund, estimating the accumulated unremitted sum to be around N1 trillion.
He expressed disappointment that, despite two years passing since the enactment of the PIA, these companies had not honored their obligation to allocate the meager three percent to the host communities.
“What is the fate of the communities at the moment? From my assessment, from 2021 till date, over N1 trillion, if converted from $500 per year, which is about $1 billion, is owed to the host community development trust fund.
“This is what is supposed to come into the host community development. But that has been denied the communities.”
Tamaramiebi complained that all global Memorandum of Understanding and the MoU that the oil firms used to sign with host communities through cluster development boards had been suspended and attention shifted to the PIA.
“But because of the PIA, the GMoUs and MoUs were suspended. The companies were using these documents for the development of host communities by grouping communities into clusters of development boards.
“With these, they were given the communities peanuts for cluster projects. With the signing of the PIB into law, all such were suspended and they were asked to implement the provisions of the law,” he said.
Tamaramiebi clarified that the Nigerian Upstream Petroleum Regulatory Commission’s involvement was primarily in a regulatory capacity and not in the direct management of the host community development trust fund.
