The Petroleum Industry Act, according to the Petroleum Products Pricing Regulatory Agency, foreshadowed the complete liberalization of the downstream oil sector.
It was quick to point out, however, that the negotiations between the Federal Government and labor would minimize the impact of the subsidy elimination on the sector’s full deregulation.
Abdulkadir Saidu, the PPPRA’s Executive Secretary, claimed in an Abuja statement that the price of gasoline will be reduced in such a way that it would not create hardship to consumers.
“There is no doubt that the PIA signifies the beginning of comprehensive deregulation of the downstream sector,” he said.
“However, it is important to highlight that the PIA does not immediately result in a rise in the price of PMS.
“Until negotiations with organized labor, which will produce a workable framework that minimizes the impact of a market-based pricing strategy on the masses, are concluded, the current price will remain.”
The PIA, according to Saidu, established a legal, governance, regulatory, and fiscal framework for the Nigerian petroleum industry, host community development, and other associated problems.
He claimed that the Act represented the start of a new era in the oil and gas industry’s growth and development.
“Keeping the promise of creating an environment with a transparent, clear, and rigorous legal and regulatory system will undoubtedly open up new vistas in the oil and gas business, as well as the Nigerian economy,” Saidu said.
He noted that, among other benefits, implementing the PIA will provide a more consistent level of operations and less burdensome regulatory oversight of the business.
“The PPPRA commends the Federal Government in particular for taking the bold step of resolving long-standing issues such as the issue of overlapping functions in the sector’s regulation,” he said.
The Nigerian Upstream Regulatory Commission, as well as the Nigerian Midstream and Downstream Petroleum Regulatory Authority, were established to clearly define the roles of industry operators and regulators, according to Saidu.