‘Deregulation Will Reduce Corruption in Oil Industry’

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By Emmanuel Addeh

Members of the Major Oil Marketers Association of Nigeria (MOMAN) , a
group comprising 11 Plc, Conoil Plc, Forte Oil Plc, MRS Oil Nigeria
Plc, OVH Energy Marketing Limited and Total Nigeria Plc, have said
current efforts to deregulate the oil and gas sector will considerably
reduce corruption in the sector.

Speaking on the last day of a webinar series organised by the virtual
Oil Trading and Logistics (OTL) Africa Downstream Expo 2020, Chairman
of the association, Mr. Adetunji Oyebanji, noted that historically,
the industry’s operations had been opaque and called for
self-regulation by stakeholders even when the Petroleum Industry Bill
(PIB) becomes operational.

He advocated a strong regulatory framework which promptly sanctions
defaulters , including those who breach anti-competition and
anti-trust laws, saying that cases of sleaze will always arise when
monitoring and compliance is not taken seriously.

“Under a regulated environment, maybe there’s only one person
supplying, then you find that someone is sitting somewhere and
allocating products to everybody. Apart from smuggling, this
corruption is part of the reasons we have long advocated deregulation
of the industry.

“Self-regulation is the best form of regulation and fills the gap in
the industry’s non-adherence to international standards and best
practices aimed at ensuring safety in the sector and building self-
confidence and trust in the industry.

“So, over and beyond what is prescribed by the PIB, players themselves
should regulate themselves. There has to be a charter, setting the dos
and dont’s for operators and members in terms of HSE, corporate
governance, excellence in service and penalties for erring members who
do not adhere to these guidelines,” he argued.

On monitoring by the regulators, he said: “There must be periodic
visits to terminals, retail outlets and other facilities to assess
standards of operations and safety.

“There should be periodic testing of products to ensure adherence with
agreed specifications as we move to this fully legislative regulatory
environment that we are going into.

“The regulator in the new PIB in the downstream, a lot of what they
should be doing is collaboration and consulting with the industry to
ensure that the rules set for the industry are apt and appropriate and
they have a buy-in and input of all stakeholders.

“A lot of what they should be doing is intervening if anti-competition
and anti-trust rules are broken by the industry.”

He stated that the industry must now begin to take the complaints of
Nigerians very seriously because many of the issues would not arise if
there was self-censorship.

“People do not understand how prices are arrived at and this is a
product that they really do not have any choice but to buy. I am never
very happy because the complaint is that the prices go up too quickly
and when they are supposed to go down, they don’t go down fast enough.

“So, there’s the need for self-discipline and self-regulation which is
very imperative in terms of ways of operation. Throughout history, the
Nigerian petroleum industry has always been very vulnerable to
corruption, sharp practices.

“And definitely while regulation can do something about that , from
the perspective of regulation, what you do as members is all very
critical,” Adetunji advised.

Earlier, speaking on a separate theme, Chairman, Board of Trustees and
former President, National Association of Road Transport Owners
(NARTO), Mr. Kassim Bataiya, advised that there should be better
conversation on the transportation of fuels in the country.

He stated that over 200 heavy trucks criss-cross the country daily
just for the supply of petroleum, saying that there must be a
clear-cut manner of operation after consultation with stakeholders.

“The issue of trucks should have its designated time. We move about 58
million litres daily. Going by 45,000 litres which they say should be
standard, we are talking about 200 trucks per day.

“And you need other trucks for AGO (diesel), DPK (kerosene), LNG
(Liquefied Natural Gas) etc. And if we are to use the pipelines, you
cannot use one pipeline for these different products because of their
nature,” he argued.