FG insists on price control amid 12 new oil regulations
IOCs, oil marketers submit 1,156 documents as NMDPRA targets investment
Despite increase in the price of petrol, also known as Premium Motor Spirit (PMS) across the country, the Federal Government, in Abuja, yesterday, said cost of the product is still being regulated, even as it blamed marketers for the price increase.
This came as the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) and thousands of oil and gas stakeholders converge to determine the fate of the nation’s downstream petroleum sector.
About 12 regulations, with input from over 1,156 experts, mainly Oil Producers Trade Section (OPTS), Independent Petroleum Producers Group (IPPG), petroleum products marketers, World Bank, Nigeria LNG Limited (NLNG) and others are being fine-tuned at the event.
Some of the regulations are Petroleum (Transportation and Shipment) Regulations, Assignment and Transfer of Licence and Permit Regulations, Midstream and Downstream Petroleum (Operations) Regulations, Petroleum Pipeline Regulations, Gas Pricing Domestic Demand and Delivery
Regulations, Natural Gas Pipeline Tariff Regulations, Midstream and Downstream Decommissioning and Abandonment Regulations, Environmental Regulations for Midstream and Downstream Operations, Midstream and Downstream Gas Infrastructure Fund Regulations and Environmental Remediation Funds Regulations.
Coming on the backdrop of the Petroleum Industry Act (PIA) passed, last year, the success or failure of the law in the downstream and midstream segments is largely dependent on the new regulations, which are expected to serve as vehicles for driving provisions of the law.
Recall that the price control for petroleum products, especially petrol and gas, has been a disincentive for many investors, and a major reason Nigeria’s petroleum industry has been unable to make significant impact in Gross Domestic Product (GDP).
Minister of State for Petroleum Resources, Timipre Sylva, at the event, said government has not deregulated the downstream segment.
Although most stations across the country now dispense petrol at N175 and above per litre, against the government-controlled price of N165, Sylva said subsidy remains on petrol.
He said: “I can tell you authoritatively that we have not deregulated. The government is still subsidising. If there are increases in the price, it is not from the government. It is properly from the marketers.”
Sylva described the new regulations as fulfilment of the provisions of Sections 33 and 216 of the PIA 2021, which mandate NMDPRA to consult with relevant stakeholders prior to finalising and making any regulations concerning the processing, refining, transmission, distribution, supply, sale and storage of petroleum products, or any other matters deemed expedient by the agency.
He added: “This administration understands the need to have all-encompassing, well thought-out and unambiguous regulatory instruments that are painstakingly developed to meet the current and future aspirations of the government. This is required to attract much needed investments and create opportunities in the sector; hence the need for stakeholders’ participation and engagement in developing regulations, processes and procedures.”
Chief Executive of NMDPRA, Ahmed Farouk, said the new regulations are the critical leeway that would unlock needed investment in the midstream and downstream segment of the petroleum industry.
According to him, the investment, which would translate to more revenue from government and job creation for the populace, will not come unless there’s clarity in the sector, adding that investors are concerned about pricing of petroleum products, especially gas.
He said while a segment, like the midstream is being opened up through the PIA, the opportunities could only come when there are investors.