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Federal Government Implements Strict Licensing Policy, Shuts Down Unlicensed Petroleum Dealers

Published

2 years ago

May 23, 2023.

The Federal Government has announced that starting from June 1, 2023, unlicensed petroleum product dealers will not be allowed to load products.
Operators must obtain a license to deal with petroleum products.
The government is encouraging operators to embrace gas derivatives and invest in the gas value chain to mitigate future uncertainties in petrol and diesel supply.

EKO HOT BLOG reports that the Federal Government made an announcement on Monday, stating that starting from June 1, 2023, no unlicensed petroleum product dealer would be permitted to load products.

The government emphasized the requirement for obtaining a license and stated, “no licence, no loading of any petroleum product.”

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This warning was delivered in Abuja during a stakeholders’ engagement on gas utilization in Nigeria, conducted by the Nigerian Midstream and Downstream Petroleum Regulatory Authority.

The objective of the engagement was to educate operators on the urgent need to obtain the necessary petroleum storage license and encourage the transition from white products to gas. Ogbugo Ukoha, the Executive Director of Distribution Systems, Storage, and Retailing Infrastructure at NMDPRA, conveyed the message, “No licence, no loading.

We still have like nine days to do the right thing and comply.” He emphasized the importance of compliance and mentioned that failure to comply would result in the closure of operators who supply petroleum products to unlicensed facilities.

Ukoha further appealed to those handling petroleum products exceeding 500-litre storage to acquire a license.

The licensing procedure involves an assessment of equipment, distance, hazards, and procedures.

He also urged operators to explore opportunities in the gas value chain, such as Liquefied Natural Gas, Liquefied Petroleum Gas, Compressed Natural Gas, Autogas, propane, and butane. Investing in these alternatives would provide a hedge against future uncertainties in the global supply of petrol and diesel.

The NMDPRA has established 12 gazetted regulations defining the licensing regime, procedures, and standards for handling petroleum products. Ukoha stressed that non-compliance with these regulations increases risks.

Farouk Ahmed, the CEO of NMDPRA, highlighted the government’s initiatives and policy frameworks, including the National Gas Expansion Programme and the Decade of Gas Programme, to promote the use of gas in Nigeria.

He expressed the hope that the stakeholders’ engagement would raise awareness and foster a compliance culture among industry operators, ensuring safer and sustainable facilities.

Ahmed also mentioned the Midstream and Downstream Gas Infrastructure Fund, established by the Petroleum Industry Act 2021, as a catalyst for gas investments.