Correcting The Lies In Dr. Olisa Agbakoba’s Assertions On Repeating The PIA Act 2021

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Eminent lawyer and Senior Advocate of Nigeria, Dr. Olisa Agbakoba, has lately been calling for the repeal of the Petroleum Industry Act 2021 which is within his rights as a citizen. But in doing so, he has been making some assertions regarding the status and operations of the NNPC Ltd that are not quite true. 

This is not an attempt to join issues with him. It is just to set the records straight, knowing that when falsehood is left unchallenged, it is accepted as the truth. 

One of the key reasons he claims to be calling for the repeal of the PIA is that under it, NNPC Ltd is playing the roles of an operator and a regulator. When pressed to be specific on the regulatory roles being performed by the NNPC Ltd, he listed “fixing prices of petroleum products” and “acting as sole importer of petroleum products”.  

The truth, however, is that the PIA does not have any provision that makes NNPC Ltd a regulator in the oil and gas industry. The PIA specifically provides for the establishment of two regulators in the industry. They are: The Nigerian Upstream Petroleum Regulatory Commission (NUPRC), and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

One of the objectives of the reforms that the PIA was designed to bring about was the scrapping of the dual roles of operator and regulator played by the NNPC as a government Corporation. Since the PIA came into force in 2021 and the consequent transition of NNPC into a limited liability company that operates under the Companies and Allied Matters Act in 2022, the Company has ceased to take on any regulatory role in strict compliance with the law.

Contrary to the learned Senior Advocate’s claim that NNPC Ltd fixes prices of petroleum products, the Company does not fix prices. In fact, no agency or entity unilaterally fixes prices of petroleum product as the PIA in Sections 205, 206 and 207 provides for a deregulated market which is currently in operation in the Downstream Sector. Under the deregulated market, every marketer is allowed to determine the price of its products as it deems fit, taking market forces into consideration. Based on this principle, NNPC Ltd through its Downstream subsidiary, NNPC Retail Ltd, fixes the prices of its products. It does not fix prices for the entire market as other marketers are at liberty to set their own prices based on market realities. This is the reason NNPC Retail stations in Abuja sell Premium Motor Spirit (PMS) at N617 per litre while other marketers sell at various prices. Similar conditions prevail across the country with different marketers selling petroleum products at different prices. If the sector was still regulated, it would be the duty of the NMDPRA to fix prices and not NNPC Ltd as a player in the industry.

On the claim that NNPC Ltd is the sole importer of petroleum products, this is also not true. Other marketers import AGO and ATK (diesel and aviation fuel). The reason they are not able to engage in the importation of PMS has to do with foreign exchange issues. But the PIA, apparently envisaging situations like this, provides that NNPC Ltd should serve as a supplier of last resort to guarantee energy security. This is very explicit in Section 64 of the PIA. That is the reason NNPC Ltd is currently the sole importer of PMS (not all petroleum products), and that does not in any way make it a regulator.

NNPC Ltd has since moved on to assume its statutory role as a commercial operator in the entire value chain of the energy industry. It has further sealed its status as a commercial operator with declaration of ₦2.52 trillion and ₦674 billion profit after tax in 2021 and 2022 respectively. 

We believe that even if other members of the public, out of ignorance, still see NNPC Ltd as a regulator based on its previous operations pre-PIA, it should not be a learned silk like Dr. Agbakoba who should be familiar with the law.