The Nigerian oil and gas industry has long grappled with issues of overlapping functions and regulatory redundancies within its petroleum associations. This duplication of roles has not only led to conflicts but has also hindered efficiency, creating an urgent need for streamlining. With Nigeria’s petroleum industry at a critical juncture navigating both the demands of global energy transition and domestic energy reforms the question of whether multiple associations can continue to coexist effectively has come to the fore.
The Rise of Overlapping Associations
In Nigeria, several associations represent diverse interests within the petroleum sector, including the Independent Petroleum Marketers Association of Nigeria (IPMAN), Major Oil Marketers Association of Nigeria (MOMAN), Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), and the Natural Oil and Gas Suppliers Association of Nigeria (NOGASA), among others. Each of these bodies represents distinct groups within the industry, from retail marketers to depot owners and oil suppliers. However, the boundaries between their functions are increasingly blurred, leading to duplication and inefficiencies.
For example, both IPMAN and MOMAN claim jurisdiction over the operations of retail petrol stations, often resulting in conflicting stances on fuel pricing, supply chain issues, and regulatory policies. Similarly, DAPPMAN and NOGASA frequently engage in disputes over fuel importation and distribution, with both associations claiming authority over import policies and supply management.
Case Study: IPMAN vs. MOMAN
A recent conflict between IPMAN and MOMAN illustrates the duplicative and conflicting roles within Nigeria’s petroleum associations. In the wake of fuel price fluctuations in 2023, IPMAN criticised MOMAN for supporting regulatory measures that IPMAN argued would adversely impact independent marketers. IPMAN claimed that the measures would limit access to wholesale fuel supplies for smaller, independent retailers, putting them at a disadvantage compared to larger, well-funded marketers under MOMAN’s umbrella.
This tension brought forth a series of disputes, with IPMAN and MOMAN issuing conflicting statements on regulatory compliance and pricing strategies. While IPMAN argued for more flexible pricing to protect small-scale operators, MOMAN held that standardised pricing was essential to maintaining supply stability. This disagreement underscored the clash between associations representing different interests within the same retail segment, creating regulatory headaches and exacerbating the instability in Nigeria’s fuel supply chain.
DAPPMAN and NOGASA: Battles Over Depot Operations
Another notable example of conflicting functions is seen between DAPPMAN and NOGASA. Both associations play crucial roles in Nigeria’s depot operations, yet their overlapping mandates often lead to disputes. DAPPMAN, primarily representing depot owners, has advocated for more stringent import regulations and quality control, arguing that relaxed standards compromise fuel quality. NOGASA, representing natural gas and petroleum suppliers, has sometimes opposed these stringent measures, arguing that they increase operational costs and limit supply flow.
In one instance, a disagreement arose when DAPPMAN called for tighter government oversight on product standards at depots, citing quality concerns. NOGASA pushed back, asserting that such regulations were unnecessary and would place an undue burden on suppliers. The result was a standoff that delayed fuel shipments and strained the already challenged supply chain, affecting the availability of petroleum products nationwide. This clash demonstrates how the duplication of oversight can lead to policy paralysis and operational inefficiencies.
Calls for Streamlined Oversight
Industry stakeholders, as well as policymakers, are increasingly calling for streamlined oversight in Nigeria’s petroleum sector to mitigate these duplications and improve efficiency. Proponents argue that a consolidation of associations would reduce bureaucratic redundancy, clarify roles, and align the industry’s objectives. They believe a unified regulatory approach could resolve conflicts and allow for more coherent policies that address Nigeria’s pressing energy needs.
The Nigerian government’s recent establishment of the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) under the Petroleum Industry Act (PIA) 2021 was aimed at addressing some of these issues. However, while these bodies oversee regulatory functions, they do not address the inter-association conflicts and duplicative roles within the industry’s associations.
Examples from Global Markets
Nigeria could learn from international examples of streamlined petroleum sector oversight. In Norway, for example, the Norwegian Petroleum Directorate (NPD) provides a unified structure where responsibilities across the petroleum value chain are clearly delineated, preventing overlaps. The UK’s Oil and Gas Authority similarly serves as a centralised body to prevent conflict among various industry stakeholders. These structures promote efficient operations, reduce costs, and prevent internal conflicts, which Nigerian policymakers and industry leaders could consider as a model.
Moving Towards Consolidation: Challenges and Recommendations
Moving towards a consolidated framework within Nigeria’s petroleum sector is a challenging but necessary step. Consolidation would require aligning the interests of diverse stakeholders and addressing potential job losses associated with merged or dissolved associations. Additionally, entrenched interests within each association may resist change due to concerns over diminished influence and reduced authority.
To address these challenges, experts recommend a phased approach to consolidation. One proposal is to create a joint council that includes representatives from each association, tasked with developing a roadmap for streamlined functions. This council could work in tandem with the NUPRC and NMDPRA to ensure that consolidation efforts align with the broader regulatory landscape. Moreover, the government could introduce incentives for associations that agree to merge or adopt joint operational standards, fostering a cooperative approach to reform.
A New Era for Nigeria’s Petroleum Sector?
The current structure of Nigeria’s petroleum associations, characterised by duplicative functions and frequent conflicts, presents a significant obstacle to the industry’s progress. Streamlining these associations would create a more cohesive industry landscape, reducing redundancies and fostering a more efficient regulatory environment. As Nigeria seeks to strengthen its domestic oil and gas sector, a consolidated approach could be the key to enhancing industry resilience, supporting economic growth, and aligning with global energy standards.
By addressing the fragmentation within its petroleum associations, Nigeria has the opportunity to redefine its petroleum sector in line with modern industry standards, setting the stage for a more efficient, conflict-free future.