Dennis Mernyi

It is already one month since the government inaugurated the management of the newly created Nigerian Upstream Regulatory Commission (NURC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

The authorities were created in line with the PIA which seeks to provide legal, governance, regulatory and fiscal framework for the development of the sector.

The agencies mandated with the responsibility for the technical and commercial regulation of the midstream and downstream operations in Nigeria was birthed from the scrapping of three hitherto extant oil regulatory agencies, the Department of Petroleum Resources (DPR), Petroleum Products Pricing Regulatory Agency (PPPRA) and Petroleum Equalization Fund (PEF).

Their key objectives to establish a progressive fiscal framework that encourages investment in the Nigerian petroleum industry was also to provide clarity, enhance revenues for the government while ensuring a fair return for investors.

On October 6th, the Nigerian senate confirmed the Chief Executive and board members of NURC. October 7the chief executive and other board members of NMDPRA were confirmed.

The new chief executive officers and board of the new agencies were inaugurated on 19th October, the same day both DPR PPPRA PEF were scrapped and their former CEOs sacked.

The establishment of the authorities was the government’s commitment to raise the country’s oil production capacity and boost investments in the upstream sector of the petroleum industry. They are also to expand the revenue generation horizon for the nation’s economy.

So far, it has been promises and promises of delivery on all deliverables including expanding gas amid rising prices, meeting Nigerians expectations by stepping up revenue growth, ending petrol crises ranging from scarcity and unstable prices, etc.

Like testing the icing cake in a meeting pan, the news agencies have indeed started with uncertainties, stumbling steps, and tumultuous waves. The deadly turbulence is already threatening their take-off.

The prices of domestic cooking gas have astronomically jumped up beyond ordinary Nigerians. Fuel scarcity, days of long queues on filling stations, and the product rising prices have resurfaced across the country.

There have been reports of disagreements between petroleum products marketers, depot operators, and tank farm owners over the increase of the landing cost, product lifting cost, and different kinds of unauthorized levies.

With all these, Nigerians have been groaning under the chaotic situation daily as the scarcity bite harder.

On his part, Farouk Ahmed Chief Executive Officer (CEO) of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDRA) charged all stakeholders to team up with the authority to ensure successes are recorded by the new agencies.

Though Ahmed, had in the wake of the crises, warned marketers against increasing the pump price of petrol, it became apparent that depot owners and tank farm operators were defiant as black marketers and products hawkers still operate freely which indicates that industry players are yet to adapt to the new regime.

Ahmed had, however, expressed concern that the Premium Motor Spirit (PMS) popularly known as Petrol is being sold at loading depots of Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) members above the official price which is caused by the erroneous insinuation of an imminent increase in the price of the product.
Directing all operational offices of the authority across the nation to ensure that all loading depots and retail outlets are dispensing petroleum at only the approved price.

But acknowledging the fact that their coming into the office is at a critical time in the life of the nation’s economy, Mr. Gbenga Komolafe of NURP has acknowledged that the task to increase revenue for the government to fund annual federal budgetary proposals for the development of critical infrastructure is going to be very competitive.

Promising some level of interventions into the high cost of domestic cooking gas, he said the commission will facilitate enhanced gas expansion programmes to improve domestic utilization of gas for power, industrialization, and deepen LPG penetration.

He has further noted that, while describing the situation of the global oil industry as “critical”, he emphasized that the energy transition poses a challenge to be surmounted by industry players. “We are coming in at a point when the expectations are high; the nation has very high expectations,” he said.

Noting that oil is at the exit point for fossil fuels and renewable energy, he said the two are in high competition to gain relevant usage against the other. This according to him, Nigeria’s petroleum sector is already faced with huge challenges of still occupying any space as global energy competition is concerned.

“In the international community, we are at a very critical moment in the life of the industry. We are coming in at a point when there is the energy transition from fossil fuels to renewable which is competing.

“It is competing with the need for the nation to have increased revenue to fund our social budgeting and our critical infrastructure. So, that itself places on us a challenge that needs us to double our efforts, roll our sleeves and begin to hit the ground running and meet the aspirations of the nation.”

“What should be of concern to us now which has been my concern in the last 24 hours is that we must all work to ensure there is no job stoppage, no distortion to activities in the sense that the industry is very time-sensitive? What we all know is that a delay for 24 hours is a lot of delay in the industry. “We should all ensure at this transition period that we are time conscious and that we do not create anything that will lead to aggravation of costs at a point when the nation requires every revenue.

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Timipre Sylva, Petroleum Resources Minister, while inaugurating the board and management last month charged them to “hit the ground running”. “Nigeria should brace up for exponential growth in the oil and gas industry,” the minister stated.

Though one month is still early to access the performances of the new authorities on how far they have fared, expectations are high and Nigerians, as well as investors, would want to see signs of significant impact. The agencies must be seen attempting to address those knotty issues the complicated industry was known for.