The Federal Government has directed the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, to ensure petroleum marketers do not exploit Nigerians through excessive pricing under the deregulated downstream petroleum market.
Minister of State for Petroleum Resources (Oil), Senator Heineken Lokpobiri, gave the directive in Abuja yesterday while delivering the keynote address at the NMDPRA General Counsel and Legal Advisers Forum.
The two-day forum has as its theme: “Beyond Compliance: Driving Regulatory Certainty and Investment Confidence in Nigeria’s Petroleum Sector.”
Lokpobiri said although the downstream sector had been fully deregulated, the regulator must ensure that deregulation does not become an avenue for profiteering at the expense of consumers.
According to him, following de-escalation of tensions in the Middle East and decline in global crude prices, Nigerians expected corresponding reductions in the pump price of Premium Motor Spirit, PMS, popularly known as petrol.
However, this is yet to happen, as refiners and marketers have continued to sell petrol at elevated pump prices despite the significant decline in crude oil prices from a peak of $120 per barrel to about $72 per barrel last week.
He said: “Following de-escalation of tensions between Iran and the United States, we expected to see a commensurate downward adjustment in the prices of PMS and other petroleum products. However, that has not yet happened.
While we believe that market forces will eventually restore equilibrium, the regulator also has a statutory responsibility to ensure that deregulation does not become an avenue for profiteering. This must be done in line with the extant provisions of the Petroleum Industry Act.”
The minister also charged the agency to intensify monitoring to ensure consumers receive the correct quantity of fuel purchased at filling stations.
‘What is the regulator doing?’ Lokpobiri asks
He said: “Beyond allowing prices to be determined by market forces, the question is: what is the regulator doing to ensure that consumers receive the correct quantity of product? When someone pays for 10 litres of Premium Motor Spirit, they should receive exactly 10 litres, not less.”
Lokpobiri noted that despite recent geo-political tensions arising from the conflict involving the United States and Iran, Nigeria did not experience fuel shortages, attributing the stability to deregulation of the downstream sector and operationalisation of domestic refineries.
He described the Petroleum Industry Act, PIA, as the foundation for transforming Nigeria’s petroleum industry but stressed that building investor confidence now depends on consistent and predictable regulation.
He said: “The PIA gave us the architecture. What we must now build is the culture, the institutional habits, the interpretive discipline and the regulatory character that make the law’s objectives real for every investor evaluating Nigeria against any other destination in the world.”
The minister urged legal advisers and general counsel in the petroleum industry to serve as strategic partners in promoting investment, rather than becoming obstacles through unnecessary regulatory bottlenecks.
According to him, “we will not be judged by the number of regulations we produce or the volume of guidelines we issue. We will be judged by the investments we attract, the businesses we enable, the jobs we create and the value we leave behind for future generations.”
Earlier, Chief Executive of NMDPRA, Mallam Rabiu Umar, said the petroleum industry has reached a stage where regulatory certainty, transparency and investor confidence has become more important than mere compliance with regulations.
