Until the signing of the Petroleum Industry Bill into law by President Muhammadu Buhari (Petroleum Industry Act 2021), the functions of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) were carried out by three agencies: the Petroleum Products Pricing Regulatory Agency (PPPRA), the Midstream and Downstream Divisions of the Department of Petroleum Resources (DPR), and the Petroleum Equalization Fund Management Board (PEFMB).
Consequently, Mr. Farouk Ahmed was appointed as the first Chief Executive of the NMDPRA.
The functions of NMDPRA are:
1) To regulate the technical activities of the midstream and downstream petroleum operations in Nigeria
2) To determine appropriate tariff methodology in the midstream and downstream operations.
3) To regulate the bulk marketing of petroleum products
4) To regulate bulk transportation of pipelines of petroleum products in Nigeria.
5) To regulate the commercial activities of the midstream and downstream petroleum operations in Nigeria
6) It is responsible for setting the cost benchmarks for midstream and downstream operations.
7) To regulate the operational activities of the midstream and downstream petroleum operations in Nigeria
8) It is its responsibility to set, define, and enforce approved standards and regulations for design, construction, fabrication, and maintenance of plants.
9) It is its responsibility to promote competition in midstream and downstream petroleum operations in Nigeria.
10) To regulate the bulk storage of petroleum products.
11) It is the function of the NMDPRA to advise the Government and stakeholders on commercial matters relating tariff and pricing framework.
12) To ensure security of supply, development of the market and competition in the natural gas and petroleum products market.
13) To regulate the bulk distribution of petroleum products.
14) To create a healthy competitive environment for private sector participation in midstream and downstream petroleum operations in Nigeria.
15) To establish customer protection measures by the provisions of PIA.
16) It is also the responsibility of the Authority to ensure that the actions and operations of stakeholders and operators in the midstream and downstream sectors comply with the terms and conditions of licenses, and permits issued by the agency.
Final thought:
In its move to create a healthy competitive environment, the head of the agency, Farouk Ahmed recently commented to denigrate the products of Dangote Refinery by saying the biggest refinery on the continent produces inferior products.
It is not only disappointing but also shows how politicized NMDPRA has become under the leadership of Ahmed.
The role of the agency doesn’t include promoting imported petroleum products over local refineries. The allegation by the founder of Dangote Group that some of the staff members of NNPC facilitate the blending of inferior products in Malta is an indictment on the entire Ministry of Petroleum Resources, including all agencies under it.
