Revitalizing Nigeria's Petroleum Industry Through the Wholesale Supply Operations Introduced by the Petroleum Industry Act 2021

Abstract The distinction between hydrocarbon production and wholesale supply operations is the key difference between the Petroleum Act of 1969 (PA) and the Petroleum Industry Act of 2021 (PIA). The PIA delineates responsibilities by restricting lessees with petroleum/oil mining leases (PML/OML) to hydrocarbon production and has introduced Wholesale Gas Supply License (WGSL) and Wholesale Petroleum Liquids Supply License (WPLSL) for entities engaged in the sale and delivery of natural gas and petroleum liquids to wholesale customers for domestic use or export. By comparing the previous regime under the PA, which was focused on the export of hydrocarbons and the import of petroleum products, this paper provides a comprehensive review of the regulatory regime for wholesale supply operations established by the PIA and identifies the benefits of wholesale supply operations in establishing distinct midstream operations. These operations provide critical linkages in the petroleum supply chain, enhancing Nigeria's energy security and maximizing the capacity utilization of gas plants and refineries. Furthermore, the paper also addresses the roles and responsibilities of various stakeholders, including government agencies, suppliers, and consumers, and seeks to promote dialogue and collaboration. Findings indicate that wholesale supply operations foster investment across the petroleum value chain, enhances transparency in hydrocarbon measurement, provide tools for enforcing domestic obligations, ensure arm's length dealings for a level-playing field, and facilitates a willing buyer-willing seller market for Nigeria's gas resources. This paper serves as a foundational analysis of the role of wholesale supply operations in enhancing market competition within Nigeria's petroleum industry and aims to contribute to the ongoing efforts to create a more competitive and transparent oil and gas sector.