NUPRC enforces 3% oil levy and registers 172 host-community trusts

Nigeria’s upstream petroleum regulator says 172 host-community trusts have now been incorporated by oil and gas companies, as it steps up enforcement of a levy created under the Petroleum Industry Act.

The Nigerian Upstream Petroleum Regulatory Commission requires companies, known as settlors, to contribute 3% of their operating expenditure from the preceding financial year to Host Communities Development Trusts. The funds are intended to support projects that improve social and economic conditions in communities hosting petroleum facilities.

NUPRC Chief Executive Oritsemeyiwa Eyesan disclosed the figure at a meeting with the Revenue Mobilisation Allocation and Fiscal Commission in Abuja. The discussion covered implementation of the PIA, including the obligations of petroleum companies and arrangements for host communities.

Eyesan said the commission had established procedures and regulations to ensure that trusts were properly constituted and that companies met their financial obligations. “We have laid out procedures for doing things, and we have put regulations in place to streamline the process. So far, we have registered 172 HCDTs, and we have been able to manage contributions by settlors,” she said.

The regulator’s announcement follows a dispute over one trust. In early August, the Fiscal Commission directed the NUPRC to dissolve it within 48 hours, citing concerns about its constitution and representation of affected oil-producing communities. The order followed an investigative hearing into Sterling Oil Exploration and Energy Production Company and the implementation of the host-community provisions.

Eyesan said trusts had already begun funding infrastructure, including schools and hospitals, in several communities. The PIA, which took effect in 2021, introduced the trusts to give oil-producing communities a direct stake in petroleum operations and support more peaceful relations with companies.

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We have laid out procedures for doing things, and we have put regulations in place to streamline the process. So far, we have registered 172 HCDTs, and we have been able to manage contributions by settlors.