PIA-2021_Petroleum Administration-Part V (Mid and Downstream Liquids).pdf

A 246 Public service obligations related to policy issues. Public service levy. 2021 No. 6 Petroleum Industry Act, 2021 171. The Authority may issue regulations imposing public service obligations on licensees in relation to matters including— (a) security of supply ; (b) economic development an...

A 246 Public service obligations related to policy issues. Public service levy. 2021 No. 6 Petroleum Industry Act, 2021 171. The Authority may issue regulations imposing public service obligations on licensees in relation to matters including— (a) security of supply ; (b) economic development and the achievement of wider economic policy objectives ; (c) environmental protection ; and (d) health and safety. 172.—(1) The Authority shall, by regulation, provide for the recovery of any additional costs incurred in complying with the public service obligations through a public service levy, which may be imposed on customers, provided that it would, in the opinion of the Authority, be in the wider public interest. (2) The amount of, and mechanism for the collection and remittance of, the public service levy imposed on each customer shall be set out in the regulations contemplated by subsection (1). Domestic gas demand requirement. 173.—(1) The Authority shall, prior to the 1st of March of each calendar year, determine the domestic gas demand requirement and inform the Commission of this requirement. (2) Subject to subsection (3), the domestic gas demand requirement shall be the total amount of marketable natural gas required for all wholesale customers of the strategic sectors. (3) Each wholesale customer of the strategic sectors shall have the right to negotiate its own supply contracts directly with lessees or suppliers and where the wholesale customer is of the view that the contracts are satisfactory for its requirements, it shall inform the— (a) Authority that there is no need to be a customer client of the domestic gas aggregator ; and (b) Commission of the lessees from which the required marketable natural gas has been obtained. PART V—ADMINISTRATION OF MIDSTREAM AND DOWNSTREAM PETROLEUM LIQUIDS OPERATIONS Activities requiring a licence for midstream and downstream petroleum liquids operations. 174.—(1) Except in accordance with an appropriate licence issued by the Authority, a person shall not undertake the following activities with respect to midstream petroleum liquids operations— (a) establish, construct or operate a terminal or other facility for the export or importation of crude oil or petroleum products ; (b) establish, construct or operate a crude oil refinery ; Petroleum Industry Act, 2021 2021 No. 6 (c) establish, construct or operate a pipeline for the bulk transportation of petroleum liquids ; (d) engage in bulk transportation of petroleum liquids by rail, barge or other means within Nigeria ; (e) establish, construct or operate a facility for the bulk storage of petroleum liquids ; (f ) establish, construct or operate a petroleum liquids transportation network ; (g) engage in the bulk sale of petroleum liquids ; or (h) undertake construction or operation of any facility for the production of lubricants or petrochemicals based on petroleum products. (2) Except in accordance with an appropriate licence or permit issued by the Authority, a person shall not undertake the following activities with respect to downstream petroleum products operations— (a) construct or operate any facility for the distribution or sale of petroleum products to retail customers ; (b) establish, construct or operate a depot for the storage of petroleum products ; or (c) undertake distribution, marketing or retail trading of petroleum products. (3) The Authority may, by regulation, prescribe additional activities to be undertaken only on the basis of a licence or permit and shall have power to issue licences or permits for the activities in accordance with this Act. (4) Where a person engages in any of the activities set out in subsection (1), (2) or (3) without a licence or permit, the Authority shall— (a) seal the premises where the activity is undertaken ; (b) dismantle and seize the facilities by which the activities were undertaken ; (c) confiscate equipment or materials employed by the person in such activity ; or (d) impose penalties as prescribed by regulations under this Act. (5) Notwithstanding any provision of this Act, a person who engages in any of the activities set out in subsection (1), (2) or (3) without a licence or permit, commits an offence and is liable on conviction to imprisonment for a term of— (a) one year or to a fine prescribed by regulation, in the case of an activity requiring a licence ; or A 247 A 248 2021 No. 6 Petroleum Industry Act, 2021 (b) six months or to a fine prescribed by regulation, in the case of an activity requiring a permit. (6) A holder of a subsisting lease, licence or permit who is engaged in activities in midstream or downstream petroleum liquids operations prior to the effective date shall, within 18 months from the effective date, apply to the Authority for, and the Authority may issue the appropriate licence or permit, where applicable. (7) The provisions of subsections (4) and (5) shall not apply to any person under subsection (6) until the Authority has considered the application and given a decision. (8) Where any person, in applying for a licence or permit, knowingly makes a false or misleading statement, the Authority may— (a) suspend or revoke the licence or permit ; or (b) impose a fine on the licensee or permit holder on the basis of the false or misleading information. (9) Crude handling agreements and any other agreements among parties entered into prior to the effective date related to midstream or downstream operations shall be submitted for review to the Authority and the Commission and where so ordered by the Authority or Commission, as the case may be, amendments shall be made in such agreements to comply with the Act. Special regulations for midstream and downstream petroleum liquids operations. 175. In addition to any matter provided under section 113 of this Act, the Authority may issue regulations with respect to midstream and downstream petroleum liquids operations, which shall include— Rights of way relating to midstream and downstream petroleum liquids operations. 176. Subject to applicable law and the terms and conditions prescribed by the Authority, a licensee or permit holder is entitled to rights of way for the laying, operation and maintenance of petroleum liquids transportation pipelines, communication lines, power lines and other similar lines through or across the areas the licensee or permit holder may require for carrying on midstream or downstream petroleum liquids operations under the licence or permit. (a) the establishment and operation of a wholesale market, to ensure the continuity of supply of petroleum products to customers, that will apply to the owners and operators of crude oil refineries, transportation pipelines and other facilities or vessels for the bulk transportation of petroleum liquids, bulk storage facilities for petroleum liquids and terminals and outlets for retail trading of petroleum products ; and (b) matters ancillary to or consequential on the activities set out in paragraph (a). Petroleum Industry Act, 2021 2021 No. 6 A 249 177. The Authority may for the purpose of efficiency, preserve rights of way, easements or other rights over any surface or seabed areas subject to an existing licence or permit, which may be necessary for the laying, operation and maintenance of petroleum liquids transportation pipelines, communication lines, power lines and other similar lines and any right of way or other rights reserved shall continue for the benefit of any entity to whom the Authority may subsequently grant the same for a licence or permit. Surface rights reserves for the Authority for midstream and downstream petroleum liquids operations. 178.—(1) The Authority may in consultation with licensees and other stakeholders with respect to midstream petroleum liquids operations, develop a network code governing the terms of access into facilities and infrastructure used in midstream petroleum liquids operations. Petroleum liquids midstream network code. (2) The network code may include the following matters— (a) a connection and interconnection policy, standard terms for connection to an open access petroleum liquids transportation pipeline or petroleum liquids transportation network and a statement of the connection charging methodology ; (b) a mechanism by which users reserve capacity in facilities and infrastructure and at any time there is a greater demand for access than available capacity, a mechanism for allocating capacity between users ; (c) the nomination ; (d) requirements for the provision of information to the petroleum liquids transportation network operator about the volume, timing and flow-rate of injections into and withdrawals from the petroleum liquids transportation network ; (e) the structure of charges and the applicable tariffs charged for using the petroleum liquids transportation network ; (f ) the balancing of crude oil, condensates or petroleum products being conveyed ; (g) registration arrangements ; (h) metering, allocation and settlement arrangements ; (i) governance arrangements ; and (j) the maintenance of a register of customers and suppliers. (3) The petroleum liquids midstream network code shall be published on the website of the Authority and physical copies shall be made available to interested persons on payment of a prescribed fee. Petroleum Industry Act, 2021 A 250 2021 No. 6 Third party access relating to midstream and downstream petroleum liquids operations. 179.—(1) Subject to section 162 of this Act, any person licenced under the provisions of this Act to supply petroleum liquids shall be permitted third party access to facilities and infrastructure used for midstream petroleum operation by owners, operating on their own account, of such facilities and infrastructure— (a) in the manner prescribed by this Act, the regulations, codes and other guidelines issued by the Authority under this Act ; and (b) on commercially viable terms based on a cost reflective pricing methodology. (2) The Authority may mediate in disputes related to third party access. Conditions for the provision of open access in relation to petroleum liquids operations. 180.—(1) Where open access applies, open access to the facilities and infrastructure used with respect to midstream petroleum liquids operations shall be— (a) undertaken on a non-discriminatory basis between system users with similar characteristics under section 116 of this Act, (b) provided in respect of any available capacity, where the capacity is not subject to a previous contractual commitment, (c) provided in accordance with and governed by the terms and conditions of the network code approved by the Authority, where applicable, (d) provided on the condition that the applicant for access is or becomes a party to and undertakes to comply with the applicable network code, and (e) subject to the pricing principles set out in section 207 of this Act : Provided that facilities and infrastructure which are specifically defined by the Authority for the storage of national strategic stocks shall be exempt from the provisions of this Act relating to open access. (2) The Authority may mediate in disputes in respect of open access. National strategic stocks. 181. The Authority shall— (a) establish, administer and ensure the storage and distribution of the national strategic stocks of petroleum products in accordance with regulations issued by the Authority ; (b) determine and publish the amount to be charged as a levy for the financing of the national strategic stocks, which shall form part of the retail price of each petroleum product, such levy to be determined as a percentage of the retail price and be deducted on wholesale basis ; and (c) designate, in consultation with the appropriate authorities and national security agencies, the strategic locations across the country where the national strategic stocks shall be distributed and maintained. Petroleum Industry Act, 2021 2021 No. 6 A 251 182. The Authority shall ensure that all companies with a licence for the bulk storage of petroleum products granted under section 187 of this Act maintain operating stocks in accordance with guidelines published by the Authority. Operating stock. 183.—(1) Subject to sections 111 and 174 of this Act and upon the approval of the Authority of an application and payment of a prescribed fee by a qualified person, the Minister may, on the recommendation of the Authority, grant and issue to that person a crude oil refining licence which shall permit the licensee to— Grant of a crude oil refining licence. (a) procure, construct, install and operate facilities to process crude oil on its own account into derivative chemicals and petroleum products ; and (b) sell such chemicals and petroleum products at the exit of the refinery. (2) In considering an application for a crude oil refining licence, the Authority shall take into account the economic case for a refinery, including the potential demand for its use. 184. The crude oil refiner shall undertake the activities contemplated by the licence in a manner that best complies with the following general obligations, to— (a) procure, construct, install, operate and maintain its refinery and associated facilities in an economical, safe, reliable and environmentally friendly manner ; (b) shut down its facilities in emergencies and in order to carry out maintenance or in accordance with curtailment directives issued by the Authority ; (c) manage its facilities as a reasonable and prudent operator ; (d) avoid any act or omission that may affect the compatibility of the refinery with any facility or network that is likely to prejudice the public interest or the integrity of network operations ; (e) produce petroleum products to a quality suitable for the transportation system as specified in the licence ; (f ) produce petroleum products to a quality suitable for use in accordance to the specifications approved by the Authority ; (g) treat all customers in a non-discriminatory manner under section 116 of this Act ; and (h) abstain from activities, which in the opinion of the Authority may prevent, restrict or distort competition. General duties of a crude oil refiner. Petroleum Industry Act, 2021 A 252 2021 No. 6 Access rights. 185. A crude oil refiner shall have the right of access to facilities, including harbours, jetties, petroleum bulk storage, transportation facilities and pumping installations in accordance with the open access or third party access requirements and the tariff methodology approved by the Authority. Conditions applicable to a crude oil refining licence. 186. In addition to conditions as may be imposed by the Authority under section 114 of this Act, a crude oil refining licence shall be deemed to be granted subject to the conditions that the holder shall— Grant of a bulk petroleum liquids storage licence. 187.—(1) Subject to sections 111 and 174 of this Act, the Authority may upon approval of an application and payment of prescribed fees, grant and issue a qualified person bulk petroleum liquids storage licence authorising the holder to undertake the bulk storage of petroleum liquids whether for its own account or on behalf of customers as provided for in the licence. (a) conduct its licenced activities safely and reliably in compliance with any law in force and prescribed health and safety related regulations, standards and operating procedures issued under this Act ; (b) have regard to the effect of its licenced activities on the environment and complying with the requirements for environmental protection, management and restoration under this Act ; (c) mark, maintain and secure the boundaries of its facilities and associated infrastructure constructed under the terms of its licence and any law in force ; and (d) comply with any conditions precedent or other conditions as the Authority may prescribe by regulation. (2) In considering an application for a bulk petroleum liquids storage licence, the Authority shall take into account the economic case for bulk storage facility, including the potential demand for its use. General duties of a bulk storage licensee. 188. The holder of a bulk petroleum liquids storage licence shall undertake the activities contemplated by the licence in a manner that best complies with the following general obligations, to— (a) establish and make available to the public at its offices, the— (i) procedure for obtaining third party access or open access, as provided for in the licence, throughput and terminating its services, and (ii) method of response to the request for its service ; (b) procure, construct, install, operate and maintain its facilities in a safe, economical, reliable and environmentally friendly manner taking into account any strategic plans formulated by the Authority ; (c) shut down its facilities in emergencies and in order to carry out maintenance or in response to curtailment directives issued by the Authority ; Petroleum Industry Act, 2021 2021 No. 6 A 253 (d) grant third party access to use or have access to spare capacity within its facilities for the purpose of ensuring competitive supply of crude oil and petroleum products, where the licensee operates on its own account ; (e) consult with the Authority and obtain written permission prior to any modification of technical and operational rules of practice concerning the operation of its facilities ; (f ) conduct its licenced activities in a non-discriminatory manner between all classes of customers under section 116 of this Act, where the licence is for bulk storage for customers and is operated on an open access basis ; (g) manage its facilities as a reasonable and prudent operator ; and (h) abstain from activities, which in the opinion of the Authority may prevent, restrict or distort competition. 189. In addition to conditions as may be imposed by the Authority under section 114 of this Act, a bulk petroleum liquids storage licence shall be deemed to be granted subject to the conditions that the holder shall— (a) where the licence is operated for the own account of the licensee, the licensee may own the petroleum liquids contained in the storage and where the licence is operated on an open access basis the licensee shall not own the petroleum liquids ; (b) conduct its licenced activities safely and reliably in compliance with any law in force and prescribed health and safety related regulations issued under this Act ; (c) have regard to the effect of its licenced activities on the environment and complying with the requirements for environmental protection, management and restoration under this Act ; and (d) mark, maintain and secure the boundaries of its facilities and associated infrastructure constructed under the terms of its licence and any law in force. 190.—(1) Subject to sections 111 and 174 of this Act, the Authority may upon approval of an application and payment of prescribed fees, grant and issue a qualified person a petroleum liquids transportation pipeline licence with the exclusive right to own, construct, operate and maintain a transportation pipeline for the bulk transportation of petroleum liquids within a route as defined in the licence for its own account with third party access provisions or as common carrier as stipulated in the licence. (2) In considering an application for a petroleum liquids transportation pipeline licence, the Authority shall take into account the economic case for a petroleum liquids transportation pipeline including the potential demand for its use. Conditions applicable to a bulk petroleum liquids storage licence. Grant of petroleum liquids transportation pipeline licence. Petroleum Industry Act, 2021 A 254 2021 No. 6 General duties of a petroleum liquids transportation pipeline owner. 191. The holder of a petroleum liquids transportation pipeline licence shall undertake the activities contemplated by the licence in a manner that best complies with the following general obligations— Conditions applicable to a petroleum liquids transportation pipeline licence. 192. In addition to conditions as may be imposed by the Authority under section 114 of this Act, a transportation pipeline licence shall be deemed to be granted subject to the conditions that the holder shall— (a) establish and make available to the public at its offices, the— (i) procedure for obtaining and terminating transmission and interconnection services, and (ii) method of response to the request for its service ; (b) construct, operate and maintain its petroleum liquids transportation pipeline in a safe, economical, and reliable manner taking into account any strategic plans formulated by the Authority ; (c) manage supply shortfalls and meet on a reasonable endeavours basis requests for transportation above contractual volumes ; (d) shut down its petroleum liquids transportation pipeline in emergencies and in order to carry out maintenance or in response to curtailment directives issued by the Authority ; (e) provide access on a non-discriminatory basis under section 116 of this Act, where the licence is granted on a common carrier basis and provide for third party access pursuant to the licence conditions where the transportation pipeline is operated for the own account of the licensee ; (f ) consult with the Authority and obtain written permission prior to any modification of technical and operational rules of practice concerning the operation of its pipeline ; (g) manage its transportation pipeline as a reasonable and prudent operator ; and (h) abstain from activities, which in the opinion of the Authority may prevent, restrict or distort competition. (a) not own petroleum liquids in the pipeline, where the licence is issued on a common carrier basis ; (b) where the holder is a licensee operating on its own account, who is a company which is an affiliate of a company that is a lessee, the licensee may own, or the affiliate may own, the petroleum liquids in a petroleum liquids transportation pipeline for the purpose of removing petroleum liquids from the lease ; (c) where the holder is a company that also holds a licence to be a wholesale petroleum liquids supplier, operating on its own account, may own the Petroleum Industry Act, 2021 2021 No. 6 A 255 petroleum liquids in a petroleum liquids transportation pipeline, for the purpose of connecting to a lessee or wholesale customer to or from a petroleum liquids transportation network or petroleum liquids transportation pipeline, subject to third party access provisions as may be included in the licence ; (d) where the holder is a company that also holds licence as a petroleum product distributor, operating on its own account, may own the petroleum liquids in a petroleum liquids transportation pipeline, where the principal user of the transportation pipeline is the petroleum product distributor, subject to third party access provisions as may be included in the licence ; (e) where the holder is a company that also holds a licence to be a wholesale petroleum liquids supplier, operating on its own account, may own the petroleum liquids in a petroleum liquids transportation pipeline, for the purpose of connecting to a lessee or wholesale customer to or from a petroleum liquids transportation network or petroleum liquids transportation pipeline, subject to third party access provisions as may be included in the licence ; (f ) conduct its licenced activities safely and reliably in compliance with any law in force and prescribed health and safety related regulations issued under this Act ; (g) have regard to the effect of its licenced activities on the environment and comply with the requirements for environmental protection, management, and restoration under this Act ; and (h) mark, maintain and secure the boundaries of the pipelines and associated infrastructure constructed under the terms of its licence. 193.—(1) Subject to sections 111 and 174 of this Act, the Authority may upon approval of an application and payment of prescribed fees, grant and issue a qualified person a petroleum liquids transportation network operator licence authorising the conduct of activities specified in the licence, which shall include— (a) conveyance of petroleum liquids through the transportation network ; (b) balancing the inputs and off takes from the transportation network ; (c) providing open access to the transportation network ; and (d) charging for the use of the transportation network. (2) The Authority shall grant only one petroleum liquids transportation network operator licence for specified petroleum liquids within a geographically defined area to a single network operator, provided that the Authority may, at its discretion, issue licences to other parties for the operation of isolated or dedicated pipelines. Grant of a petroleum liquids transportation network operator licence. Petroleum Industry Act, 2021 A 256 2021 No. 6 General duties of a petroleum liquids transportation network operator. 194. The petroleum liquids transportation network operator shall exercise the rights and obligations imposed on it in a manner that best complies with the following general obligations— Powers of a petroleum liquids transportation network operator. 195. Subject to this Act, the Authority may grant the following special powers or authority to a petroleum liquids transportation network operator to facilitate the conduct of its licenced activities— (a) establish and make available to the public at its offices, the— (i) procedure, terms and conditions for obtaining and terminating access and interconnection services to the transportation network, and (ii) method of response to the request for its service ; (b) operate an efficient and economical transportation network for the safe and reliable conveyance of specified petroleum liquids in a manner that is designed to meet all reasonable demands for the specified petroleum liquids ; (c) operate a nomination and balancing mechanism and an equitable curtailment of transportation whenever technical or operational expediencies require ; (d) consult with the Authority and obtain written permission prior to any modification of technical and operational rules of practice concerning the operation of its transportation network ; (e) ensure the development and operation of a network code and terms for access into the transportation network in collaboration with the Authority, shippers, licensees and permit holders operating essential infrastructure ; (f ) ensure equitable and transparent open access, subject to the provisions of section 116, to the transportation network in accordance with the network code ; (g) manage the transportation network as a reasonable and prudent operator ; (h) abstain from activities, which in the opinion of the Authority may prevent, restrict or distort competition ; and (i) enter into agreements with transportation pipeline owners, distributors and wholesale customers for connection to, and operation of, the transportation network. (a) the power to request and obtain from shippers information required to operate the nominations and balancing mechanism to operate the network or to facilitate competition ; (b) the right to recover, on the basis of an invoice, expenses reasonably incurred in undertaking its licenced activities, subject to any conditions Petroleum Industry Act, 2021 2021 No. 6 A 257 imposed by the Authority with respect to the level and structure of its charges ; and (c) to purchase petroleum liquids for its own operations for purposes such as testing and commissioning of facilities, compression purposes and line fill. 196.—(1) In addition to such conditions as may be imposed by the Authority under section 114 of this Act, a petroleum liquids transportation network operator licence may include an obligation to develop market rules in accordance with the provisions of this Act. (2) A petroleum liquids transportation network operator may be owner of any or all of the petroleum liquids transportation pipelines in the petroleum liquids transportation network. Conditions applicable to a petroleum liquids transportation network operator licence. (3) Where third parties are owners of certain petroleum liquids transportation pipelines in the petroleum liquids transportation network, the owners shall be paid by petroleum liquids transportation network operator the tariffs determined for non-operating owners of the pipelines. (4) A petroleum liquids transportation network operator shall not misuse its monopoly position in the geographical area to charge franchise or other access charges for providing access to the petroleum liquids transport network other than the charges specifically permitted under this Act and its regulations. 197.—(1) Subject to sections 111 and 174 of this Act, the Authority may upon approval of an application and payment of prescribed fees, grant and issue a qualified person a wholesale petroleum liquids supply licence. (2) A company that is a lessee producing crude oil or condensates or both or is a holder of a crude oil refining licence is a qualified person for the purpose of subsection (1) and shall be entitled to apply for and be issued a wholesale petroleum liquids supply licence by the Authority. Grant of a wholesale petroleum liquids supply licence. (3) A wholesale petroleum liquids supply licence authorises the supplier to sell and deliver petroleum liquids to bulk customers in Nigeria or for export. 198. A wholesale petroleum liquids supplier shall undertake the activities contemplated by the licence in a manner that best complies with the following general obligations, to— (a) provide a reliable supply of petroleum liquids to purchasers on request, provided that it is economically feasible ; and (b) abstain from activities, which in the opinion of the Authority may prevent, restrict or distort competition. General duties of a wholesale petroleum liquids supplier. Petroleum Industry Act, 2021 A 258 2021 No. 6 Rights of a wholesale petroleum liquids supplier. 199. Subject to this Act, the Authority may grant the following specific powers or authority to the holder of a wholesale petroleum liquids supply licence to facilitate the conduct of its licenced activities, the right to— Conditions applicable to a wholesale petroleum liquids supply licence. 200.—(1) In addition to conditions as may be imposed by the Authority under section 114 of this Act, a wholesale petroleum liquids supply licence shall be deemed to be granted subject to the supplier— (a) terminate wholesale supply to a customer in the event of nonpayment, following a notice period as prescribed by regulation ; (b) recover from a customer, on the basis of an invoice and subject to any conditions imposed by the Authority on the level and structure of a licensee’s charges and costs reasonably incurred in the supply of petroleum liquids, provided that the sale of petroleum liquids to customers by the wholesale petroleum liquids supplier shall be subject to the provisions of this Chapter ; and (c) enter a premises, in accordance with a metering code issued by the Authority, for the purpose of reading the meters, testing, maintaining metering equipment, disconnecting customers and to remove meters. (a) ensuring a reliable and efficient supply of petroleum liquids to customers on request, provided that it is economically feasible ; (b) supplying petroleum liquids on request to a customer who is willing and able to pay for connection to the transportation network or transportation pipeline, subject to safety and network capacity constraints ; and (c) conducting licenced activities safely, reliably and in an environmentally friendly manner in compliance with any law in force and any health and safety related regulations issued by the Authority under this or any other Act. (2) A wholesale petroleum liquids supplier shall undertake its licenced activities in a manner that best complies with the covenants and conditions of the licence and with customer protection measures approved by the Authority. Grant of licence for distribution of petroleum products. 201. Subject to sections 111 and 174 of this Act, the Authority may upon approval of an application and payment of prescribed fees, grant and issue a qualified person a petroleum product distribution licence. General duties of petroleum product distributor. 202. In addition to conditions the Authority may impose under section 114 of this Act or that may be prescribed by regulation, a petroleum product distribution licence shall be deemed to be granted subject to the duty of the holder to— Petroleum Industry Act, 2021 2021 No. 6 A 259 (a) develop and maintain a safe, efficient, reliable and economical service for the distribution of petroleum products to individual customers and petroleum product retailers ; (b) carry on its business in a manner that will promote competition and avoid monopoly in the retail supply of petroleum products in Nigeria ; (c) conduct its licenced activities safely and reliably in compliance with any law in force and prescribed environmental, health and safety regulations issued under this or any other Act ; (d) publish the prices to be charged and to be paid by a person to whom the distributor sells petroleum products in a manner to ensure adequate publicity unless the Authority prescribes otherwise ; (e) avoid undue preference or discriminate as between persons or any class of persons in establishing prices ; and (f ) comply with customer protection measures approved by the Authority. 203.—(1) Subject to sections 111 and 174 of this Act, the Authority may upon approval of an application and payment of prescribed fees, grant and issue a qualified person a petroleum product retail licence authorising the holder to establish, construct and operate a facility to be employed for retail sale of petroleum products. (2) The Authority shall issue guidelines in respect of the process for the establishment, construction and operation of facilities to be employed by petroleum product retailers for retail sale of petroleum products. 204.—(1) Subject to sections 111 and 174 of this Act, the Authority may upon approval of an application and payment of prescribed fees, grant and issue a qualified person a petrochemicals production licence authorising the holder to establish, construct and operate a facility for the production of petrochemicals and sell the petrochemicals produced. (2) The Authority shall issue guidelines in respect of petrochemicals production licences. 205.—(1) Subject to the provisions of this section, wholesale and retail prices of petroleum products shall be based on unrestricted free market pricing conditions. (2) Where the Authority determines that a particular licenced activity is a monopoly service or a service by an excessively dominant supplier, the Authority shall have the power to regulate the tariffs and prices charged by the respective licensee in respect of the activities in a manner consistent with the Authority’s duties under this Act and with the pricing principles set out in section 207 of this Act. Grant of a licence to construct and operate a facility for retail supply and distribution of petroleum products. Grant of a licence to construct and operate a facility for the production of petrochemicals. Pricing regime and power to regulate tariffs. Petroleum Industry Act, 2021 A 260 2021 No. 6 Wholesale prices for petroleum products. 206.—(1) The holder of a wholesale petroleum liquids supply licence and a wholesale customer shall, subject to the provisions of this Chapter, negotiate the wholesale prices directly between the parties on an arm’s length basis, provided that the transfer price shall be transparent and reflect the transfer price between the parties. (2) The Authority shall have power to monitor bulk sale of petroleum products and may publish market-based prices in order to ensure that the transactions are undertaken in a manner that transfer pricing between the supplier and the wholesale customer are undertaken at a transparent arm’s length basis. (3) The supplier shall, within 14 days of the consummation of a transaction relating to the bulk sale of petroleum products, provide the Authority with information relating to the transaction including, where applicable, the cost incurred by the supplier in the production or supply of the product and other information relevant to the price at which the product is sold. (4) A supplier who knowingly provides information, which is false or misleading with respect to the information required in subsection (3) is liable to a fine stipulated by the Authority in regulations. Pricing principles in relation to petroleum products. 207. Where under section 205 (2) of this Act, the Authority regulates the tariffs and prices of a licensee, the Authority shall allow the seller to recover reasonably and prudently incurred costs, including a reasonable return on the capital invested in the business. Publication of prices. 208. Licensees shall publish prices as required by the Authority in a manner that ensures that the customers are able to identify and calculate the extent of charges for which they will become liable. PART VI—OTHER MATTERS RELATED TO MIDSTREAM AND DOWNSTREAM OPERATIONS Public service obligations 209. The Authority may issue regulations imposing public service obligations on licensees or a class of licensees in relation to the maintenance of strategic stock for which the Authority shall approve a tariff to be paid by the consumers. Competition and market regulation. 210. The Authority shall, subject to the provisions of the Federal Competition and Consumer Protection Act, have the responsibility to— Act No 1, 2018. (a) monitor the state of the markets regulated by the Authority ; (b) administer, monitor and ensure compliance with the provisions of this Act and any law or regulation issued in respect of competition and market regulation ;