The Federal Government’s
draft National Oil Policy has proposed to consolidate Nigeria’s oil
industry regulatory authorities into a single agency to be known as
Petroleum Regulatory Commission, PRC, while scrapping all other
regulators, including the Nigerian National Petroleum Corporation, NNPC,
Department of Petroleum Resources, DPR, and Petroleum Products Pricing
Regulatory Agency, PPPRA, among others.
According to the
document released by the Ministry of Petroleum Resources, last weekend,
the new regulator will incorporate the activities of the existing
petroleum regulatory authorities and also cover some new regulatory
activities not currently covered.
The document
revealed that the existing institutional regulatory framework was weak,
largely ineffective and inefficient, arising from a number of
single-issue agencies; overlaps in regulation, gaps in regulation,
mixture of policy, regulation and operations; and ineffective
regulation.
It stated:
“Although the agencies generally work well together, their roles,
sometimes, overlap and there are significant information gaps within the
government as, sometimes, one institution is unaware of what the other
is doing.
“At the same time, policy making capacity has been weak,
resulting in NNPC and its subsidiaries setting policy and regulation as
well as conducting operations in the petroleum sector. The result is an
ineffective and inefficient institutional environment in the petroleum
sector in Nigeria.”
The draft policy is
also proposing that, in order to reduce the inefficiencies in
parastatals in the petroleum sector, the proposed single petroleum
sector regulatory authority will operate under the policy supervision of
the Minister of Petroleum Resources.
According to the
document, the Minister will set the policy for the PRC; ensure
monitoring of the implementation of the policy; and ensure monitoring of
the performance of the authority.
“This does not mean that the
regulatory authority will report to the Ministry on a day to day basis.
The new single regulatory authority will be an operationally independent
regulatory institution. The Minister’s involvement will be hands off
and just to ensure that the regulatory authority properly carries out
its roles of implementing the policy,” it explained.
From Vanguard