•Operators ask the regulator to assume its responsibilities
• Look for a gap in the law on the petroleum industry

Oil producers and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) were yesterday at loggerheads over who should collect the 0.5 percent bulk levy.

While the NMDPRA said oil producers should collect the money and remit it to its account, stakeholders said the regulator should collect it to avoid putting an additional burden on them.

The Director General of NMDPRA, Farouk Ahmed, during a stakeholder sensitization held in Lagos, said the objective of the engagement was to address issues and concerns raised during the first phase of sensitization of the NMDPRA and achieve alignment that would enable the effective implementation of bulk supply operations.

Ahmed, who was represented by NMDPRA Legal Adviser, Joseph Tolorunse, said the Petroleum Industry Act (PIA) came into force in August 2021, introducing licenses for bulk supply operations, such as prescribed sections 142 and 197 of the law.

According to him, licenses are the appropriate instrument for entities engaged or wishing to engage in the sale and delivery of natural gas and petroleum liquids, for domestic use or for export. He said the benefits of bulk sourcing operations include promoting investments throughout the petroleum value chain, improving transparency in hydrocarbon measurement, providing tools to enforce obligations national standards, ensuring arm’s-length transactions for a level playing field, and serving as a pathway for willing sellers. hydrocarbon resource transactions.

“However, due to unresolved issues, the NMDPRA has been overwhelmed by disagreements regarding the implementation of bulk procurement operations. So, during this stakeholder awareness workshop, your issues and concerns will be discussed and NMDPRA’s position on these concerns will be provided, in an interactive manner.

“Again, as players in this industry, it is important to note that it is our collective responsibility to ensure that current and future demands for bulk supplies of petroleum gases and liquids are met. It is not only essential for our national economy, but also an integral part of the global energy market,” he said.

Ahmed called for collaborative work to enable the operationalization of guidelines that would pave the way for optimized mid- and downstream oil and gas operations, boost infrastructure development and foster collaborations that would contribute to the growth of the country’s energy sector. country.

The PIA stipulates that 0.5 percent of the wholesale price of petroleum products sold in Nigeria, which will be collected from wholesale customers, will form part of the revenue for the NMDPRA.

There have been debates over whether money should be charged separately, as in the case of value added tax (VAT). But the regulator pointed out that the expression “0.5 percent of” had been used instead of “0.5 percent of”, arguing that the levy should be deducted from the wholesale price. A representative of Oando PLC, Emmanuel Cofie-Spiff, said oil producers are not against the law, but spotted a gap in the PIA because it does not specify who the collector should be.

He stressed that industry players have no problem with the regulations, recognizing that the PIA constitutes the law. However, he explained, operators have identified some gaps in the law, which is why they are engaging with NMDPRA and industry stakeholders to reach consensus on the way forward.