An official said that some organisations are operating outside the regulatory oversight which is not in accordance with the Petroleum Industry Act (2021).
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) on Monday said it will sanction any depot or operator supplying petroleum products to unlicensed marketers as from June.
The agency disclosed this at a programme tagged 'Stakeholders' Engagement on Gas Utilization in Nigeria', which held in Abuja on Monday.
Speaking at the event, the Executive Director, Distribution Systems, Storage and Retailing Infrastructure, NMDPRA, Ogbugo Ukoha, said the engagement sets the objective to enlighten the end-user category on the need to urgently obtain the requisite petroleum storage license.
According to him, the engagement is also designed to engender the transition from white products to gas at the last mile.
"Many of these invited institutions are not only the heaviest consumers of diesel but have also been identified as operating outside the regulatory oversight which is not in accordance with the Petroleum Industry Act (2021)," he said.
He noted that the agency's twelve gazetted regulations define the licensing regimes, procedures and standards for handling petroleum products which when breached pose increased risks.
In addition, Mr Ukoha said gas as the transition fuel represents a cleaner and more cost-effective energy source.
"We encourage operators and businesses to take advantage of the evolving opportunities in the gas value chain for sustainable business growth by positioning their energy needs to embrace gas derivatives (LNG, LPG, CNG, Auotogas, Propane & Butane) in order to hedge against future global uncertainties to diesel supply.
"Finally, the support and collaboration of operators and business are enjoined to achieve a safer and cheaper energy operating environment," he said.
He appealed to all petroleum handlers to fully comply with the provisions of the PIA and NMDPRA regulations to avoid strong regulatory enforcement which may adversely impact on business operations.
"If there is low compliance we can assure you from the Authority that 1st June there will be no license, no loading. Any depot, any license operator who supplies petroleum products to an unlicensed facility, we will shut down the operator.
"Please anybody who wants to handle petroleum products in excess of 500 litre storage is required to have a license," Mr Ukoha said.
He noted that the agency's statutory mandate remains to enable industry growth.
Also speaking at the event, the agency's Chief Executive, Farouk Ahmed, said the engagement seeks to encourage large consumers of petroleum products to not only operate within the regulatory space but also to become aware of the comparative advantages in the different fuels, particularly gas.
He said it is in this regard that the federal government has put in place various initiatives and policy frameworks including National Gas Expansion Programme (NGEP) and the Decade of Gas Programme (DOGP).
He explained that the petroleum industry Act (2021) has also established within the authority the midstream and downstream gas infrastructure fund to catalyze gas investments.
"These efforts are yielding significant results, yet more collaborations and interventions are needed to improve domestic gas utilization.
"The Authority empowered by the petroleum industry Act 2021 is poised to enable the growth of the industry. The twelve (12) regulations recently gazetted unlock the golden opportunities and signpost the pathway to energy security.
"It is therefore our hope that this engagement will create the necessary awareness and make the compelling case for industry operators to foster a compliance culture which alone guarantees safer and sustainable facilities," he said.