NMDPRA Unveils Six Regulations For Gas Pricing, Petrol Measurement, Others

In line with provisions of the Petroleum Industry Act (PIA), the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has launched six regulations to ensure clarity and promote the ease of doing business in the midstream and downstream operations of the oil and gas sector.

The regulations were; Midstream and Downstream Petroleum Operations Regulations 2023, Petroleum Measurement Regulations 2023, Assignment or Transfer of Licence and Permit Regulations 2023, Natural Gas Pipeline Tariffs Regulations
2023, Gas Pricing, Domestic Demand and Delivery Regulations 2023, and Petroleum (Transportation and Shipment) Regulations 2023.

The regulations were expected to aid the Authority in controlling processes, setting standards, and monitoring operations in the technical and commercial aspects of the nation’s midstream and downstream petroleum sector

The Authority Chief Executive (ACE) of the NMDPRA, Farouk Ahmed who spoke at the launch on Wednesday in Abuja, disclosed that besides the six regulations, 14 others have been developed and would soon be launched. He added that the PIA emplaced a framework for the development of the relevant regulations that would help support and drive sustainable growth and investment across the oil and gas value chain.

He said: “The Petroleum Industry Act (PIA) 2021 is the key legislative instrument that governs the business of petroleum operations in Nigeria and sets the rules for all activities in the Petroleum sector. The Act emplaced a framework for the development of the relevant regulations that will support sustainable growth and investment across the oil and gas value chain in Nigeria.

“Accordingly, the NMDPRA in consultation with relevant stakeholders has developed the regulations. Our regulations have been designed to enable businesses through regulatory clarity, certainty, fairness, transparency, and best Industry standards.

“In addition to the regulations being launched, fourteen (14) other regulations have been developed and shall be issued shortly.”

While commending the Authority’s Regulations Drafting Team for a job well done, the ACE gave assurances of the Authority”s commitment to “collaborating and engaging with industry stakeholders whilst promoting transparency and accountability, in the implementation of these regulations.”

The ACE who also launched the Midstream and Downstream Oil and Gas Industry Service Permit (MDOGISP) portal to harmonize all the service providers for the industry, noted that with effect from March 31st, 2023, any company desiring to do business with the Authority must be registered and issued a permit.

Board Secretary/Legal Adviser, NMDPRA, Joseph Folorunsho who explained that the regulations would provide the necessary sanctions and penalties for non-compliance, noted that the Petroleum Measurement Regulations 2023 would help curb oil theft and losses as it would help determine the basis for calculating revenue accruing to government, licensees, contractors and all other parties in the midstream and downstream operations.

“Meters must now be installed in all the measurement points across the sector which we have not had before. Now there is no way an operator can actually operate without installing an appropriate measurement system. Also if you install. an appropriate measurement system, definitely it will stem the spate of crude oil losses through theft in the value chain.

“It also specified that the method of measurement has to be approved. You cannot choose an individual measurement method like in the old where operators use systems that suit them. It is no longer allowed. If you are going to use a static and dynamic measurement system, it has to be approved by the authority.

“And stiff penalties range from monetary penalties to even shutdown if possible. A shutdown with no oil flow, but then if it comes to a situation where we have to shut you down, you will be shut down.

“Compliance is not only a governance issue but also a major issue for operational authority, the authority will hammer on compliance when things go wrong.”