Hot SourceWill the 2025 PIA amendment fuel progress or reignite old problems? asks HARUNA INUWA
In Nigeria, oil isn’t just a resource—it’s the lifeblood of the economy, fueling everything from foreign exchange to public services. Yet, for decades, mismanagement and inefficiency have bled this vital sector dry. In 2021, the Petroleum Industry Act (PIA) promised a new era of transparency and efficiency, a beacon of hope for a nation weary of opaque deals and erratic production. Four years later, a sweeping amendment bill aims to reshape this landmark law. But as Nigeria stands at this crossroads, the question looms: will the PIA Amendment of 2025 tighten fiscal discipline or unravel the progress so hard-won?
After nearly two decades of heated debates and stalled drafts, Nigeria’s Petroleum Industry Act of 2021 was a triumph of persistence. It aimed to untangle the knots of a dysfunctional oil and gas sector by clearly defining roles: the Ministry of Petroleum would set policy, the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) would regulate, and a newly incorporated NNPC Limited would operate as a commercial entity, free from the political meddling that had long plagued its predecessor, the Nigerian National Petroleum Corporation.
The vision was ambitious: transform NNPC Limited into a global player akin to Saudi Aramco or Petrobras, driven by profit, not politics. The PIA sought to lure investors, boost transparency, and restore Nigeria’s clout in the global energy market. For a fleeting moment, optimism surged. Nigeria seemed poised to harness its vast oil wealth with newfound professionalism.
Fast forward to 2025, and the Federal Government has unveiled a bold PIA Amendment Bill, promising to plug fiscal leakages and boost revenue. On the surface, the changes seem pragmatic, but they strike at the heart of the PIA’s structure, raising eyebrows among industry watchers.
Key proposals include: NUPRC as Concessionaire: The upstream regulator would take over from NNPC Limited as the government’s representative in all oil and gas contracts.
MOFI’s New Role: The Ministry of Finance Incorporated (MOFI) would become NNPC Limited’s sole shareholder, sidelining the Petroleum Ministry.
Fiscal Control by MOFI: MOFI would set NNPC Limited’s strategic direction, centralizing oversight of its operations.
Joint Regulation: Integrated upstream-midstream projects would now fall under the dual oversight of NUPRC and NMDPRA.
The government’s rationale? Tighter cost verification, reduced revenue losses, and greater accountability. But beneath the surface, these changes threaten to blur the lines the PIA so carefully drew, risking a return to the murky governance of the past.
Imagine a football match where the referee suddenly dons a player’s jersey yet insists on keeping the whistle. That’s the conundrum posed by making NUPRC both regulator and commercial counterparty in oil contracts. The 2021 PIA deliberately separated roles to ensure impartiality—a global best practice in energy governance. By merging these functions, the amendment creates a glaring conflict of interest.
How can NUPRC fairly regulate contracts it negotiates? Who ensures transparency when the umpire is also a player? Industry experts warn that this move could erode investor trust. The PIA’s promise of clear boundaries was a magnet for foreign capital; blurring those lines risks painting Nigeria as unpredictable, a label it can ill afford in a competitive global market.
The creation of NNPC Limited in 2021 was a cornerstone of the PIA’s vision: a state-owned company operating under the Companies and Allied Matters Act, led by professionals and insulated from political whims. The amendment, however, threatens to clip its wings.
By placing NNPC Limited under MOFI’s direct control, the Finance Ministry would not only hold shares but also dictate strategic and operational decisions. This shift risks dragging NNPC Limited back to the days of bureaucratic gridlock and political interference, undermining its commercial agility.
For international oil companies and investors, such uncertainty raises red flags. Sudden changes to ownership and contracting rules could inflate risk premiums, deter capital inflows, and stall projects critical to Nigeria’s energy future.
The oil sector may seem like a distant battlefield of policy and power, but its ripples touch every corner of Nigerian life. A misstep in reform could mean:
· Economic Strain: Reduced investment slows oil production, weakening the naira and tightening foreign exchange.
· Budget Shortfalls: Disrupted contracts could shrink revenue to the Federation Account, starving funds for roads, schools, and salaries.
· Eroded Trust: A politicized NNPC risks reviving the opacity that once shrouded oil deals, betraying Nigerians’ hopes for transparency.
From the price of petrol at the pump to the stability of the naira in markets, the stakes of this amendment extend far beyond boardrooms.
No one disputes the need for change. Nigeria loses billions annually to weak oversight, inflated costs, and fiscal mismanagement. But the solution lies in strengthening institutions, not collapsing their boundaries. Instead of centralizing power, Nigeria could:
· Empower NUPRC’s Oversight: Grant the regulator stronger auditing powers but keep it independent from commercial roles.
· Ensure Transparency: Mandate public, annual revenue reconciliation reports and rigorous cost audits of NNPC operations.
· Protect NNPC’s Autonomy: Reinforce corporate governance with an independent board and clear performance metrics.
· Build Investor Confidence: Maintain stable, predictable rules to attract capital without risking long-term trust.
Good governance thrives on checks and balances, not concentrated control. By preserving the PIA’s separation of powers, Nigeria can address fiscal leakages while signalling to the world that it’s open for business.
The PIA Amendment of 2025 is a high-stakes gamble. Handled with care, it could streamline revenue collection and bolster accountability. Handled poorly, it risks undoing the 2021 reforms, re-politicizing the oil sector, and alienating investors at a time when Nigeria needs them most. Reform is not the enemy—hasty, ill-considered reform is. Indeed, Nigeria doesn’t need to sacrifice institutional integrity to fix its oil sector. It needs clear rules, robust oversight, and a commitment to letting professionals steer the industry free from political shadows.
As the world watches, so do millions of Nigerians, whose livelihoods hinge on whether this amendment becomes a catalyst for progress or a step backward into the dark days of mismanagement. The choice is Nigeria’s to make—will it light the path forward or dim the hope kindled in 2021?
Inuwa is PhD student at the University of Oxford. He can be reached via inuwaharuna10@gmail.com
