The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) yesterday defined Wholesale Customer of Petroleum Liquids as the one that supplies 10 million litres per annum.
The Authority in its document titled: “Regulatory Regime for Wholesale Supply Operations,” which made the definition a refiner as one who uses 65,000 barrels per annum.
The NMDPRA presented the document in Abuja at the stakeholders sensitization program on regulatory regime for wholesale operations.
The document said the duty of a wholesale supplier is to provide reliable supply of hydrocarbon to its wholesale customers.
He or she is expected to remit wholesale levies collected as component of wholesale price paid by wholesale customers as applicable.
NMDPRA said the “Petroleum Industry Act (PIA) introduced the concept of wholesale supply to ensure delivery of hydrocarbons to the midstream and downstream petroleum sector.”
The PIA, said the document, also ensures appropriate licence for any person engaged in the sale and delivery of petroleum liquids to wholesale customers either for domestic use or export.
Earlier, NMDPRA Chief Executive, Engr. Farouk Ahmed recalled that the PIA came into existence in August 2021, introducing licences for wholesale supply operations as prescribed in sections 142 and 197 of the Act.
Represented by the Hydrocarbon Processing Plants, Installations and Transportation Infrastructure, Engr. Francis Ogare, he said the enforcement of the PIA stipulations would have commenced since 2021.
He said while some of the operators are complaining that the law should be upturned others are complaining of paucity of cash owing to non-payment from their customers.
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Ahmed, however, revealed that the government has been worried that the NMDPRA has not enforced the law fully in this regard.
He told the operators that “This programme is to tell you this law of the country. When we write you the letter of non-compliance we are saying you are not following the law.”
These licences, he said, are the appropriate licences for entities engaged in, or wishing to engage in, the sale and delivery of natural gas and petroleum liquids, for domestic use or exports.
He explained that wholesale gas and petroleum liquids supply operations marks a significant evolution from the Petroleum Act of 1969 (PA) that was focused on production and exports only, to the Petroleum Industry Act of 2021 (PIA), which ensures domestic energy security in addition to exports.
He said the benefits of wholesale supply operations cannot be over emphasized.
Continuing, he said they include fostering investments across the petroleum value chain, enhancing transparency in hydrocarbon measurement, providing tools for enforcing domestic obligations, ensuring arm’s length dealings for a level playing field, and acting as a pathway for willing buyer-willing seller transactions of Nigeria’s hydrocarbon resources, amongst many other significant advantages.
According to him, however, due to lingering issues, NMDPRA has been inundated with contentions regarding the implementation of wholesale supply operations.
He said the “recently published Guidelines on Wholesale Gas and Petroleum Liquid Supply Operations on our NMDPRA website will be the focus of the presentation.
“There will be discussions on the wholesale supply licensing framework, qualified persons for the licence, and opportunities for collaborations to ensure maximum benefits are derived from wholesale supply operations.
“As is the practice with NMDPRA, the program shall be interactive with a question-and-answer session after the presentation is made.
“This will enable us to gather feedback that will aid the smooth implementation of these guidelines.
Finally, as stakeholders in this industry, it is important to note that it is our collective responsibility to ensure that current and future wholesale gas and petroleum liquids supply demands are met.
“This is not only pivotal to our national economy but also integral to the global energy market.
“I therefore appeal to you to explore these opportunities through the operationalisation of these guidelines that will pave the way for optimised midstream and downstream oil and gas operations, energise development of infrastructure and foster collaborations that will contribute to the growth of our nation’s energy sector.”