How Nigeria’s Petroleum Act implementation impacts oil marketers

The Nigerian government is gearing up for the implementation of the Petroleum Industry Act scheduled for August 2022. This milestone comes after the appointment and confirmation of board members for the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Nigerian Upstream Regulatory Commission have been finalized. Olumide Adeosun, Chairman of the Major Oil Marketers Association of Nigeria, sat down for an interview with CNBC Africa to shed light on the implications this development has for oil marketers in the country. Adeosun began by delineating the critical roles played by the Major Oil Marketers Association of Nigeria. He explained that the association serves as a strong voice for the industry's interests in a sector heavily regulated by the government. With 90% of petroleum products in the country distributed by the PPMC, the association's mission includes advocating for energy security, efficient distribution, and addressing challenges in fuel allocation. Additionally, the association leads in self-regulation, focusing on health, safety, environmental quality, and consumer protection. The implementation of the Petroleum Industry Act marks a significant achievement for Nigeria's oil and gas sector. Adeosun commended the government for the landmark legislation, which provides much-needed stability and regulatory clarity for investors. By clearly delineating the roles and governance structures of regulatory bodies, the act signals a conducive environment for investment and operations. While the creation of regulatory bodies is a positive step, Adeosun emphasized the importance of effective leadership and team building to drive policy implementation during the specified transition period. In response to concerns about the foreign exchange (FX) situation impacting oil marketers, Adeosun highlighted the challenges faced in importing products like Jet A1 aviation fuel and lubricants. Delays in the banking channel prompted some industry players to turn to the parallel market for faster transactions. The FX situation has broader ramifications across manufacturing sectors, underscoring the need for streamlined processes to maintain industry efficiency. Another pressing issue discussed in the interview was the dynamics surrounding subsidies and the landing cost of petrol. Adeosun acknowledged the complexities of the subsidy regime and its implications for petroleum product pricing. As a major player in the downstream market, the Major Oil Marketers Association of Nigeria looks forward to collaborating with the government to navigate these challenges and ensure a smooth transition under the Petroleum Industry Act. Looking ahead, Adeosun emphasized the importance of consultation and engagement with key stakeholders in the industry to facilitate the effective implementation of the act. The association is committed to working alongside the government to address issues such as the FX situation and subsidy dynamics to promote sustainable operations in Nigeria's oil and gas sector. In conclusion, Nigeria's oil marketers, represented by the Major Oil Marketers Association of Nigeria, are poised to adapt to the changing regulatory landscape ushered in by the Petroleum Industry Act. With a focus on innovation, efficiency, and industry collaboration, stakeholders aim to navigate challenges and capitalize on opportunities in a shifting energy market.