Following the recent passage of the Petroleum Industry Governance Bill (PIGB) operators in the downstream sector of the Nigerian oil and gas industry have called on the House of Representatives to expedite action on concurrent passage of the bill so as to scrap Nigerian National Petroleum Corporation (NNPC), the Department of Petroleum Resources (DPR) and the Petroleum Product Pricing and Regulatory Agency (PPPRA).
The stakeholders who spoke with Shipping Position Daily in Lagos last week opined that the three agencies can no longer be regarded as regulatory agencies but that they have since turned to commercial agencies. The operators have therefore called for the establishment of a central regulatory agency that combines the functions of the three and which would give the sector a new breath.
The PIGB bill, if eventually passed by the House of Representatives and signed by the President into law, will lead to unbundling and restructuring of the Nigeria National Petroleum Corporation (NNPC) and the Department for Petroleum Resources (DPR) and also create new agencies with more responsibilities.
Speaking in this regard, Vice Chair of Stakeholders and Tank Farms Operating at the Ibafon Jetty in Lagos; Mr. Alloy Uchendu proposed that the NNPC should be made a commercial venture and its regulatory role should be divested. He said there is no need for the House of Representatives to delay its concurrent assent to the PIGB after 17 years delay.
According to him, the Federal Government should inaugurate an agency, whose only role would be regulatory and that such an agency should not be an operator in the oil and gas sector. For example, he alleged that DPR as an agency have not been effective in curbing the excesses of filling stations selling fuel above pump price. He said that more often, the officials look the other way while these activities are going on.
“In actual fact, you have these agencies as multiple regulators running into one another’s functions. Hence, I agree that we should have a central regulatory body and let these agencies focus on purely commercial ventures”
“The other thing we need to adopt is the concept of incorporated ventures, which minimizes government’s intervention in the running of the enterprises” he said
Also speaking with Shipping Position Daily, Chief Executive Officer of Uwacare Foundation, Mr. Ossai Uwaka said that there is need for government to look into the operations of major agencies in the downstream sector with a view to restructuring their operations.
He noted that the NNPC has become the major importer of thirty six million liters of petroleum products consumed daily by Nigerians and this has left most of the petroleum tank farms redundant and idle. He noted that this is a major pointer that NNPC cannot is a commercial agency more than a regulatory outfit.
He however called for caution in scrapping the NNPC, DPR and PPPRA because according to him, for every decision proposed by the Federal Government, there are always positive and negative sides to it.
He told our correspondent that “the agencies have not been functioning at the appropriate capacities and it would not be a bad idea to scarp them. However, we should do this restructuring gradually. A sudden scrapping would allow for increase in fuel prices if the government does this scrapping without the proper consultation”.
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