Buhari

The Federal Government led by President Muhammadu Buhari has made a proposal to bring the regulatory bodies of the nation’s oil sector under one umbrella to be called the Petroleum Regulatory Commission, PRC.

The proposed merger will bring together oil regulatory institutions such as the Nigerian National Petroleum Corporation, NNPC,Department of Petroleum Resources, DPR and Petroleum Products Pricing Regulatory Agency, PPPRA as a single unit that will cover new regulatory activities not previously conducted.

The drafted plan states: “Although the agencies generally work well together, their roles, sometimes, overlap and there are significant information gaps within the government as, sometimes, one institution is unaware of what the other is doing.

“At the same time, policy making capacity has been weak, resulting in NNPC and its subsidiaries setting policy and regulation as well as conducting operations in the petroleum sector. The result is an ineffective and inefficient institutional environment in the petroleum sector in Nigeria.”

On refineries, it said: “Of the three NNPC refineries (Port Harcourt, Warri and Kaduna), Port Harcourt is expected to be the best placed to succeed. It has installed its independent gas-fired power supply; it has undertaken its own turnaround maintenance; it is close to jetties and the pipeline length from crude oil suppliers is short (less of a pipeline security risk); it is operationally ready to produce refined products to international standards, although the cost structure is still not right.

“Of the three, Kaduna, is perhaps, the least ready currently because of its distance from crude oil supplies and reliance on a poorly maintained crude oil pipeline.

“The storage depots were originally part of the refineries but had been subsequently transferred from the refineries to the Pipeline and Products Marketing Company, PPMC, (now Nigerian Petroleum Marketing Company, NPMC).

“This arrangement is not considered to have been successful. NPMC has failed to manage the depots effectively and the refineries have been denied an important part of their assets. The storage depots will, therefore, be returned to the refineries.

“In addition, the perimeter fence around the refineries will be set sufficiently far from the operations, including depots to ensure that proper security can be maintained. Everything inside the perimeter fence will belong to the refinery solely and will be on each refinery’s asset register.”

The proposal also reveals that the Minister of Petroleum Resources will create policies for ensuring the smooth performance of the body.