Despite an increase in the price of petrol, also referred to as Premium Motor Spirit (PMS) across the country, the Federal Government, in Abuja, yesterday, stated that the cost of the product is still being regulated, even as it faulted marketers for the price increase.
This came as the Nigerian Midstream Downstream Petroleum Regulatory Authority (NMDPRA) and thousands of oil and gas stakeholders converged to decide the fate of the nation’s downstream petroleum sector.
About 12 guidelines, with input from more than 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 guidelines are Petroleum (Transportation and Shipment) Regulations, Assignment and Transfer of License 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 solely dependent on the new regulations, which are expected to act 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 not been able to make a significant impact on Gross Domestic Product (GDP).
Minister of State for Petroleum Resources, Timipre Sylva, at the event, said the government has not deregulated the downstream sector.
Although most fueling stations across the country now sell 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 subsidizing. If there are increases in the price, it is not from the government. It is properly from the marketers.”
Sylva portrayed the new regulations as fulfillment of the provisions of Sections 33 and 216 of the PIA 2021, which assigned NMDPRA to consult with relevant stakeholders prior to finalizing 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, noted that the new regulations are the critical leeway that would open needed investment in the midstream and downstream segment of the petroleum industry.
According to him, the investment, which would result in more revenue from government and job creation for the country, will not come unless there’s clarity in the sector, noting that investors are disturbed 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.