The Nigerian Midstream and Downstream Petroleum Regulatory Authority has been advised to engage with industry stakeholders for a successful implementation of the Petroleum Industry Act (PIA).
Mr Clement Isong, Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), gave the advice during a panel session at the 15th Oil Trading and Logistics (OTL) Africa Petroleum Downstream Week 2021 on Wednesday in Lagos.
The Federal Government had set up an implementation committee for the PIA which was signed by President Muhammadu Buhari on Aug. 16 .
The new law provides an opportunity for purposeful investment into the development of oil and gas resources by providing clear and simple fiscal terms that would guarantee reasonable investors margin.
Isong said: “The downstream oil and gas sector through the PIA, has a golden opportunity to achieve sustainability and economic growth.
“What is needed now is leadership because the role of the regulator is vital in achieving this clear vision for the sector.
“The authority has the duty to regulate the technical and commercial operations in the downstream sector to promote and optimise natural resources, revenue and economic growth.
“The authority needs to play the role history demands of it by protecting the market, industry and the common man.
“Engagement with the industry is key. To ensure guaranteed transparency, the authority must engage with the industry and the industry must engage with the authority.”
According to him, the Nigerian downstream sector is headed for major changes geared towards positioning the country competitively as an investment destination.
He said the Authority must strive to provide a level-playing field,guard against the negative effects of a monopoly and encourage inflows – both domestic and international, from private sector investments.
Isong added that the implementation of the PIA was now more critical than the law itself.
“Petroleum products pricing needs to be right. We need to eliminate pricingdistortions and create a competitive market for the sale and distribution of petroleum products and natural gas.
“Price competition will over time lead to innovation which should reduce logistics and distribution costs.
“The pricing strategy needs to take into consideration freight, ship to ship, landing costs, jetty throughput charges and storage costs.
“We need to also eliminate cross-subsidies among different categories of consumers and across different parts of the country.
“Price competition should and will drive internal equalisation of petroleum prices,” he said.
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