The Federal Government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), now enforces a 0.5% levy on the wholesale price of petroleum products and natural gas. This policy, detailed in the Midstream and Downstream Petroleum Operations Regulations 2025, supports the Authority Fund under Section 47 of the Petroleum Industry Act and the Midstream and Downstream Gas Infrastructure Fund under Section 52.
Suppliers collect the levy from wholesale customers at points of sale for both imported and locally refined products. Remittance occurs within 21 days after the month of sale, with inclusion in invoices, receipts, and purchase agreements. Suppliers submit monthly reports on volumes, prices, customer details, and transaction documents. The NMDPRA issues receipts upon verification, monitors wholesale points for quality and quantity certification, and applies sanctions for non-compliance, including 10% monthly penalties on unpaid amounts plus potential license suspension or facility shutdown.
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This development advances regulatory self-sufficiency. The Authority Fund finances NMDPRA operations, while the Infrastructure Fund supports gas pipelines, storage, processing facilities, and transportation networks. Consistent collection generates steady revenue for sector oversight and infrastructure growth, fostering investment in domestic energy supply and reducing reliance on external funding sources.
Challenges arise from implementation. Suppliers bear collection and remittance duties, which add administrative burdens and potential costs passed along the supply chain. Industry stakeholders previously raised concerns over responsibility allocation, with some preferring direct collection by the regulator. Enforcement ties compliance to licensing, creating pressure for operators to adapt quickly.
Overall, the policy aligns with the Petroleum Industry Act’s goals of efficient regulation and infrastructure development. It promotes transparency through reporting and documentation requirements. Success depends on clear guidance, stakeholder cooperation, and visible use of funds for intended purposes, ensuring benefits reach energy security and economic stability across Nigeria.
