REGULATORS of the petroleum industry yesterday reacted to the latest rumbling in the sector, which assumed a worrisome dimension at the weekend as long queues returned to filling stations across the country.

Although the Federal Government has postponed the November 1 take-off of the deregulation of the downstream sector of the oil and gas industry, marketers who alleged that the Nigerian National Petroleum Corporation (NNPC) has reviewed upward product prices, at the weekend adjusted their pump price or refused to sell to motorists.

In a reaction to the marketers' claims, the NNPC yesterday said there was no truth in the charge.

Also yesterday, the Department of Petroleum Resources (DPR) said it would begin the monitoring of the activities of fuel stations today to deal with those hoarding fuel to create artificial scarcity.

The NNPC said it had not adjusted the ex-depot price, which marketers used as an excuse to either hoard products or sell above the official pump prices of products. The corporation also said it had enough petroleum products to meet the national demand.

In the event of the stock depleting, the NNPC said more cargoes laden with products were on at the Atlas Cove waiting to discharge more products.

At the National Assembly, the joint Senate Committee on Petroleum Matters has rejected some provisions of the Petroleum Industry Bill (PIB). The panel, it was learnt, recommended the scrapping of Petroleum Equalisation Fund (PEF) and the National Midstream Regulatory Agency, which are key aspects of the PIB.

The Speaker of the House of Representatives, Dimeji Bankole, who spoke yesterday in Lagos on the proposed deregulation of the downstream sector, urged Nigerians to embrace it, because it was the most feasible options to revive the industry.

The NNPC Group General Manager, Public Affairs, Dr. Levi Ajuonuma, yesterday advised motorists to avoid panic buying of products ahead of speculation that prices would go up from November 1, 2009.

Ajuonuma told The Guardian that there was no need for such action as the corporation has enough fuel to last the country for 42 days.

"People should not get themselves involved in panic buying. We have over three months' stocks beyond Christmas period," he said.

In a statement issued last night, Ajuonuma said: "The petroleum products we have in our storage facilities right now can serve the entire country for 42 days if in that period we do not receive further supplies. But the good thing is that we are receiving supplies every day, and I can assure you that there will be enough fuel from now through the period of the Moslem and Christian festivities up to the New Year."

Besides the NNPC, he said, other market operators were free to bring in fuel to make supply situation more robust.

NNPC, he added, has ordered for over 60 cargoes, which are waiting to berth.

An official of the Petroleum Products Marketing Company (PPMC), a subsidiary of the NNPC, said deregulation is a national issue that is being discussed by the Federal Government, Labour and civil society groups and stakeholders in the oil and gas industry, adding that the agency has no intention to increase its depot price.

He said the PPMC had distributed products through its pipelines nationwide and described the present scarcity as artificial.

The official accused the marketers of capitalising on the postponed deregulation date that was earlier fixed by the government for Sunday.

He said: "We have enough products in stock. We have finished pumping products to Mosimi from Atlas Cove."

The PPMC chief was however optimistic that the queues at the retail outlets would fizzle out today as more products are supplied to the retailers.

"By tomorrow (today), the queues would be over. People are just rushing to buy fuel thinking that deregulation would take effect today (yesterday) being the beginning of the new month. But government is still negotiating with Labour and the civil society groups. There are also some vessels at Atlas Cove waiting to discharge products. So, there is no cause for alarm because we have enough product that can meet the needs of Nigerians," he added.

The DPR said that it was aware of the artificial scarcity of products created by marketers, especially in Lagos and the Federal Capital Territory (FCT), adding that it had sent out workers to sanitise the system.

DPR Head of Operations, Lagos Zone, Mr. Gbenga Koku, told The Guardian yesterday that the agency would embark on a nationwide inspection of filling stations from today.

He said the monitoring would be carried out simultaneously, warning that any filling station caught hoarding products would face the wrath of the law.

Koku said the DPR had perfected strategies at the close of business on Friday to check the excesses of marketers as it was envisaged that they could hoard products from last weekend.

On the nature of sanctions awaiting erring marketers, Koku said: "Definitely, we would embark on monitoring of the filling stations nationwide soon and those caught would be shut down indefinitely."

The Senate sub-committee on the Downstream in its report to the joint committee, which met in Calabar, Cross River State last month, recommended that PEF and the Midstream Regulatory Agency be disbanded as their activities would negate the principle of deregulation in the post-reform period.

The joint committee had rejected the National Midstream Regulatory Agency clause, noting that its formation as recommended by the Oil and Gas Reform Implementation Committee and the NNPC could make the planned National Oil Company a monopolist.

The report also rejected section 348(d) of the PIB, which mandated refining companies in Nigeria to own and operate all depots attached to the refinery they operate.

According to the panel, the issue should be optional to the operators as admittance of the clause in the law would create the present situation where the NNPC enjoys the monopoly of refining and storage facilities.

The report also rejected section 350(5) of the PIB, which states that "no regional storage depot company shall engage directly or indirectly in any other operational activity in the downstream sector with the exception of bulk transportation."

In rejecting the provision, the panel insisted that such clause placed undue restriction on operations and should therefore be deleted because it negates the principle of the deregulation of the downstream sector, which "allows free entry and exit for all players."

The committee however included a representative of oil producing communities in the place of a representative of National Union of Petroleum and Natural Gas Workers (NUPENG) in the board of the Petroleum Products Regulatory Agency (PPRA).

To this effect, the committee endorsed the PIB proposal for the setting up of PPRA, which shall grant technical and commercial licenses to all downstream petroleum operators.

It also accepted the setting up of a National Petroleum Assets Management Agency (NAPAMA), a body to monitor operations of the upstream joint venture firms and the implementation of the Nigerian Content Act in the upstream or exploration and production sector of the industry.

The report listed the function of NAPAMA as investment monitoring and not regulation for the industry.

It said: "The committee in carrying out its duties expunged and modified all sections of the PIB on downstream petroleum operations, which tended to make provision for the setting of benchmark prices for or outright price control of petroleum products in the country.

"To this effect, market fundamentals of supply and demand are expected to determine oil price in the post-PIB era."

Bankole said it is better to face the challenge of deregulation now than in the future because the government is having problems raising money to develop and maintain national infrastructure.

He, however, disclosed that the House would meet with Labour, the Executive arm of government, and other stakeholders to work out a plan to make the policy work.

Bankole told reporters at the Presidential Wing of the Murtala Muhammed Airport, Lagos yesterday, that the panic buying of products was unwarranted.

According to him, the National Assembly would ensure that Nigerians who would be adversely affected by the policy are catered for.

He said: "Well, whether we like it or not, there are some challenges in the oil industry we must face. If we do not face it today, we will have to face it in the future. And the challenge is raising revenue for government.

"However, panic buying of fuel is not the solution to the problem. The National Assembly will continue to work day and night to ensure that those that will be adversely affected will be somewhat looked after. We have to sit with Labour, with the Executive arm of government, the Minister of Petroleum, and civil servants as well as other stakeholders to work out a plan to make sure that things at least go on well," he added.