NMDPRA to resolve wholesale gas producers’ regulatory issues

The Nigerian Midstream and Downstream Petroleum Regulatory Authority has stated its commitment to resolve contentions regarding the implementation of wholesale supply operations of natural gas and petroleum liquids regulations in the country. It also mentioned that concerns related to the 0.5 per cent levy imposed by the Midstream Downstream Gas Infrastructure Fund will be reevaluated […]

The Nigerian Midstream and Downstream Petroleum Regulatory Authority has stated its commitment to resolve contentions regarding the implementation of wholesale supply operations of natural gas and petroleum liquids regulations in the country.

It also mentioned that concerns related to the 0.5 per cent levy imposed by the Midstream Downstream Gas Infrastructure Fund will be reevaluated to address the challenges in complying with the Petroleum Industry Act.

The NMDPRA Authority Chief, Farouk Ahmed, gave this assurance at a stakeholder sensitisation program on the requirements, opportunities, and value of wholesale gas and petroleum liquid supply operations held at its headquarters on Wednesday in Abuja.

According to him, the event was organised to discuss challenges and receive feedback from gas producers and suppliers on the effectiveness of the PIA in relation to gas and petroleum liquid production.

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At the meeting, Wholesale natural gas producers and suppliers in the gas sector lamented the implementation of 0.05 per cent levy charged by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

While NMDPRA argues that the gas infrastructure development fee should be collected by wholesale gas suppliers and remitted to the Authority, operators contend it is the responsibility of the regulator to collect the fees.

The suppliers under the aegis of the Oil Producers Trade Section explained that the implementation of the 0.5 per cent MDGIF levy was not possible due to several factors.

According to them, many of the gas supply contracts were signed years before the adoption of the Petroleum Industry Act, which made it difficult to introduce such a requirement retroactively.

Additionally, some of their customers, including generating companies, have yet to make payments for gas that has already been supplied and strongly disagreed that gas producers should be made to remit funds even when they are being owed for supplies made as far back as 2011.

Represented by the OPTS Gas sub-committee chairperson, James Makinde and Vice Chairperson, Princess Edeimu-Chukwumah, the operators insisted that Section 52-7A of the PIA empowers the NMDPRA to take on that responsibility.

“You’ve been empowered by the PIA section 52-7A to do what you are asking us to do. And in the regulation, 23 section 13-2 you’ve been empowered to be the collector, Edeimu-Chukwumah emphasised.

However, the NMDPRA assured that all the issues raised will be looked into and a full-scale workshop will be organised to enable both regulators and operators to get clarity on the areas of contention.

Speaking in his welcome address, NMDPRA Chief Executive, Farouk Ahmed, stated that the organization would ensure the fulfillment of both current and future demands for wholesale gas and petroleum liquids supply.