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Monday, July 15, 2024

NMDPRA proposes $2m penalty for tampering with oil meters

.Approves two more regulations to strengthen the industry

For tampering with petroleum products metering systems or its ancillary equipment without approval, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA),  is set to impose a $2,000,000 per meter sanction against erring retailers or marketers in the country.

At a three-day consultation meeting in continuation of efforts to streamline its regulations which came as a fallout of the new Petroleum Industry Act (PIA) which ended on Thursday in Abuja, the NMDPRA Chief Executive Officer ,  Mr. Farouk Ahmed,  represented by by the Executive Director, Distribution Systems, Storage & Retailing Infrastructure, Mr. Ogbugo Ukoha, Ahmed noted that in addition, part of the new proposed sanctions would see that employment/ engagement of non-accredited Authority contractors for fabrication, construction, calibration, testing are fined $5,000 per facility.

Also, using an unapproved tank for storage of hydrocarbon without approval per tank will attract a $5,000 fine while using an unapproved tank for storage or changing tank petroleum product without approval will attract N1 million.

Modification, alteration, and upgrade of LACT or measurement system (Export) without the Authority authorization would cost defaulters $250,000 per system even as they will part with $25,000 for modification, repair, and alteration of surface or underground hydrocarbon storage tanks without approval.

NMDPRA Chief Executive Officer ,  Farouk Ahmed

“Non-compliance in ensuring Authority representatives witness outturn verification at the port of discharge per loaded vessel or shipment is $250,000.

The authority also introduced two sets of regulations to the nation’s downstream sectors.

According to Ahmed, the latest set of regulations would deal with health and safety in the sector as well as the accuracy of measurement devices to ensure that no party is cheated.

The CEO explained that it was the Authority’s objective to be guided by the collaboration with the operators in the market, pointing out that the NMDPRA considers it very critical to the success of the new PIA.

A review of the document showed that some of the objectives of the new regulations would be to oversee the safety and occupational health in the Nigerian midstream and downstream petroleum operations and provide for the safety standards to be observed during petroleum operations.

It also sets out the permits, authorizations, and fees for such activities, outlines the duties of licensees and permit holders and provides sanctions and penalties for failure to comply with the regulations.

On the safety regulation, part of the new proposed rules was that operators shall provide for their personnel sufficient and appropriate safety equipment and personal protective equipment of internationally approved standards and ensure that such equipment is always maintained in good condition.

“They will also establish emergency medical procedures including an appropriately manned and well-equipped onsite clinic, standard first aid boxes and automated external defibrillators situated at strategic locations in the facility, and medical evacuation procedures.

“They are also to provide firefighting and first aid equipment at every facility or installation in accordance with best industry standards and ensure that all personnel including contractors undergo occupational fitness tests and minimum industry training in a manner specified by the Authority,” the NMDPRA stated.

It would also ensure that all major accident hazards associated with the project/facility would be identified, recorded, analyzed, and reduced to as low as reasonably practicable while every safety, emergency, and communication systems conform to acceptable standards and specifications.

In addition, the Petroleum Measurement Regulations shall ensure accurate measurement and allocation of petroleum, petroleum liquids, natural gas, and their derivatives.

It would also determine the basis for calculating revenue accruing to the government, licensees, contractors, and other parties as well as provide sanctions and penalties for failure to comply with the regulations.

It further proposes that licensees shall ensure all metering and allocation systems are designed, fabricated, inspected, tested, and installed in accordance with the regulations and guidelines issued by the Authority.

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