Mr. Clement Isong, Executive Secretary, MOMAN
Speaking at the 15th Oil Trading and Logistics (OTL) Africa Petroleum Downstream Week 2021, Clement Isong, Executive Secretary, Major Oil Marketers Association of Nigeria (MOMAN), was of the view that the new Nigerian Midstream and Downstream Petroleum Regulatory Authority needs to engage with industry stakeholders so as to implement the Petroleum Industry Act (PIA).
It will be recalled that the PIA was recently signed into law by President Muhammadu Buhari after legislative rigmarole for twenty years.
Notwithstanding, the PIA provides an opportunity for investment into the development of oil and gas resources by providing clear and simple fiscal terms that would guarantee reasonable investors’ margins.
Isong stated further that the downstream oil and gas sector through the PIA has a golden opportunity to achieve sustainability and economic growth. Industry stakeholders are to play vital role in achieving this clear vision for the sector.
He stated that 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.
According to him engagement with the industry is key to ensure guaranteed transparency. The authority must engage with the industry and the industry in turn should engage with the authority for maximum output.
Isong said the Nigerian downstream sector is headed for major changes geared towards positioning the country competitively as an investment destination. Thus, 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.
The implementation of the PIA is critical for the downstream industry. Price competition will lead to innovation which will also reduce logistics and distribution costs.
The MOMAN scribe added that petroleum products pricing should be set straight right to eliminate pricing distortions and create a competitive market for the sale and distribution of petroleum products and natural gas.
In his words: “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.”
Therefore, price competition will drive internal equalisation of petroleum prices in the downstream industry.
Stakeholders are hopeful with the advent of PIA, Nigeria’s downstream will find its feet again.
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