OPS faults PIG bill over power concentration

The yet to be passed Petroleum Industry Governance (PIG) Bill, being advocated for by the National Assembly to promote transparency, accountability, commercial drive and attract potential investors in the Nigerian petroleum industry has been faulted by the Organized Public Sector (OPS).

The Director-General, Manufacturers Association of Nigeria (MAN), Segun Ajayi-Kadiri, in a press conference organised by the OPS in Lagos, stressed that the responsibilities to be handled by the proposed commission is too enormous and cut across various value chains in a key sector of the economy.

He maintained that the weight and measures functions as expected, will be solely vested in the commission and all government agencies exercising powers and functions in relation to the petroleum industry would be required to consult them.

Ajayi-Kadiri cautioned the national assembly against passing such bill that will give rise to a single regulator for the whole petroleum sector, which will birth a rigid bottleneck that will negate the ease of doing business and solidify regulatory monopoly.

He said: “The idea of a single regulator for the whole sector runs contrary to industry standards which by default already provide for an Upstream and Downstream Regulator and an omnibus regulator will further result in cumbersome and constant delays in securing the necessary approvals to conduct business.

“A single regulator will create complexities and challenges for operators in the petroleum value chain because the structure, operation and nature of the downstream are totally different from that of the upstream sector.”

Ajayi-Kadiri argued that as there are different operators on the petroleum sector value chain with diverse objectives, ranging from guarding against systemic risk to protecting the individual consumer from fraud, the diverse objectives will be too complex for a single regulator to effectively manage. 

The Director-General, Nigeria Employers’ Consultative Association (NECA), Segun Oshinowo, also speaking for the OPS at the roundtable, said it will be inappropriate to concentrate too much power in one body, in a sector where there are different players by creating an omnibus commission to regulate the downstream and upstream with a yardstick that is not industry-friendly.

According to him, the bill, which proposes the establishment of Boards for the Commercial Entities did not reflect appropriate balance of powers to ensure effective Board oversight, reduce the risk of executive led decision making and promotion of adequate independence of the board to minimise undue government interference.

“Having monopoly is injurious to development. The challenges that the downstream sector and the upstream sector are facing are wide and vast.

“We strongly canvass for the creation of two regulatory bodies each focusing on the downstream and upstream sectors of the Industry and o n the entire gamut of technical and commercial issues in each of the sub-sectors,” he said.

He maintained that the OPS supports that there is no need creating another regulatory agency that will further swell the list of existing agencies with similar functions and duplicated mandates.

OPS canvass that the PPPRA, which has been saddled with the responsibility of commercial regulation and has the relevant experience, structure and personnel, should be strengthened to continue to superintend the downstream sector of the Petroleum Industry while the Department of Petroleum Resources (DPR) oversees the upstream sector.