ABSTRACT
Petroleum has become the number one resource in the world because of its universality. All other resources are demanded in varying scales, but not petroleum. However the catch is that while demand increases, existing production of this pearl declines. In Nigeria, the problem appears to be a double-edged sword. Declining production and the apparently doubted efficacy, and confused state, of the fiscal laws relating to petroleum operations in the country remain intractable problems which the government is grappling with. This calls for a re-examination of fiscal policy. Thus taxation is an inherent element of fiscal policy. The petroleum industry as a major revenue earner for the government is not immune from this inherent element. However, concerns surround the efficacy of the fiscal law relating to petroleum operations having regard to the hackneyed calls for, and untiring efforts at discovering, cheaper alternative sources of energy, in a world whose economic activities are now unleashing backlash effects in the form of ozone layer depletion, global warming and other environmental concerns. More than this fear however, the government itself recognizes that something is wrong somewhere regarding the beneficial effects or rewards of petroleum to the Nigerian people, having decried the porosity of the fiscal regime relative to the petroleum sector. Yet the fiscal regime of petroleum operations in Nigeria appear to be 'very strong' when viewed against the backdrop of plethora of legislation specific to this area. The PPTA, the CITA, the PSC Act and the Incentives Act, apart from other related legislation which have elements of fiscal policy, are principal legislation here. Natural with man to find walk around for impediments, it would appear that some of these legislation are hew in such a way that it amounted to emasculating the Nigerian economy, sabotaging the rights of the Nigerian people to development and impeding economic independence of the nation, so that, on account of the latter, the economic structure of the country is perpetually neo-colonialist. Aware of these dangers, the government embarked on a reform agenda of petroleum operations in Nigeria, propped by the well conceived Petroleum Industry Bill (PIB) 2008. With the passage of the FIRS (Establishment) Act 2007, the stage appears set for marked improvement in the revenue to be generated from this prime economic viii resource. The Act and the PIB 2008 (if eventually passed into law) will undoubtedly concatenate to deliver a measure of transparency, responsibility and accountability with respect to fiscal regime governing this sector. But this is as far as administrative and legal framework is concerned. Sadly, in a desperate bid to save the system, the government adopts carrot-and-stick measures. In the alternative, what is needed, among others, is a responsible political system where infrastructural facilities are not epileptic or waning, where energy supply (in terms of power) is steady and stable, where security of lives and property is not a daydreaming fantasy and where good governance framework is the avowed commitment of the government. These are the key elements of realizing and sustaining the efficacy of the fiscal regime attending to petroleum operations in Nigeria.