The federal government, on Wednesday, January 14, tightened regulatory pressure on fuel suppliers and their wholesale customers in the downstream petroleum sector with the enforcement of a 0.5 per cent levy on the wholesale price of petroleum products and natural gas.
In the recently published Midstream and Downstream Petroleum Operations Regulations (MDPOR) 2025, stated that suppliers of petroleum products are mandated to collect and remit the levy at wholesale points, making compliance a condition directly tied to licensing and continued operation in the sector.
Section 47 of the Petroleum Industry Act (PIA) stipulates that the NMDPRA shall maintain a fund (in this act referred to as the ‘Authority Fund’) into which money accruing to the commission shall be paid.
The source of the authority fund shall, among others, be 0.5 per cent of the wholesale price of petroleum products sold in Nigeria, which shall be collected from wholesale customers.
For clarity, the NMDPRA, in its operations regulations, emphasised that the levy would be collected by suppliers from their wholesale customers for imported or locally refined petroleum products and sold in Nigeria.
“There shall be paid to the authority fund 0.5 per cent of the wholesale price of petroleum products sold in Nigeria, which shall be collected from wholesale customers by a supplier at wholesale points for imported petroleum products sold in Nigeria and petroleum products produced, processed, refined, and sold in Nigeria,” the NMDPRA declared.
Aside from the authority fund, operators are also expected to pay another 0.5 per cent of the wholesale price of petroleum products and natural gas sold in Nigeria to the Midstream and Downstream Gas Infrastructure Fund (MDGIF).
“There shall be paid to the MDGIF 0.5 per cent of the wholesale price of petroleum products and natural gas sold in Nigeria, which shall be collected from wholesale customers by a supplier at wholesale points for imported petroleum products sold in Nigeria and natural gas sold in Nigeria and petroleum products produced, processed, refined and sold in Nigeria,” the regulator stated.
It stressed that the levies in the sub-regulations shall, in accordance with the Petroleum Industry Act (PIA), form part of the wholesale price of petroleum products and natural gas sold in Nigeria.
It stated, “The levy in sub-regulation (1) of this regulation shall be due immediately upon the sale of petroleum products and shall be remitted by the supplier to the authority fund not later than the 21st day following the month of the sale, or as may be directed by the authority.
“The levy in sub-regulation (2) of this regulation shall be due within 21 days of the sale of petroleum products and natural gas sold in Nigeria and shall be remitted by the supplier to the MDGIF not later than the 21st day following the month of the sale, or as may be directed by the authority.
“The levies in sub-regulations (1) and (2) of this regulation shall be included in purchase agreements, invoices, receipts, and any other document between a supplier and a wholesale customer evidencing the sale of petroleum products or natural gas.”
The NMDPRA added that the supplier shall, not later than the 30th day of each month, submit a report to the authority detailing the volumes, prices, and names of wholesale customers, alongside copies of purchase agreements, invoices, receipts, and any other relevant documents evidencing the sale of petroleum products or natural gas.
It noted, “The authority shall, upon confirmation of payment of the levies, issue a receipt to the supplier, who shall, in turn, provide the wholesale customer with a copy of the receipt.
“The authority shall monitor wholesale points for the issuance of certificates of quantity and quality, as well as the reconciliation of petroleum products or natural gas sold.”
The regulator warned that it would sanction any operator who fails to comply with the directives.
“Where a supplier of petroleum products or natural gas fails to remit the levies to the authority fund or the MDGIF as prescribed under these regulations, the supplier shall, in addition to the outstanding amount, be liable to an administrative penalty equal to 10 per cent of the unpaid sum for each month or part thereof after the date on which payment became due,” it warned.
In addition to the penalty specified in sub-regulation (10), the NMDPRA stated that it may suspend the licence of a defaulting supplier until all levies and penalties are paid, or suspend the operations of the facility into which the petroleum product or natural gas was processed, discharged, or stored until full payment is made.
Comments