Liberia: Senator Chie Calls for LPRC Overhaul to Conflict of Interest

22 January 2025
The Liberian Investigator (Monrovia)
By Lennart Dodoo

Monrovia — Grand Kru County Senator Albert Tugbe Chie has called for an urgent review and restructuring of Liberia's downstream petroleum sector to eliminate conflicts of interest and improve efficiency. In a letter addressed to Senate President Pro-Tempore Nyonblee Karnga Lawrence and other senators on January 20, 2025, Senator Chie highlighted critical flaws in the operations of the Liberia Petroleum Refining Company (LPRC) and proposed a comprehensive reform.

"The LPRC is acting as both referee and player in the management of the sub-sector," Senator Chie pointed out, referencing the company's dual roles of regulatory oversight and commercial operations. "How can the LPRC license importers of petroleum products and at the same time be an importer? How can the LPRC set prices through the monthly petroleum prices circular for importers when it is also an importer?" he queried, stressing the institutional conflict that undermines fairness and market efficiency.

Senator Chie's proposal draws on the 2009 National Energy Policy, which called for the unbundling of overlapping functions in Liberia's energy and petroleum sectors. The policy recommended that policy setting, regulatory oversight, and commercial operations be assigned to separate entities. While reforms have been implemented in the power and upstream petroleum sectors, the downstream petroleum sector remains unchanged, with the LPRC maintaining overlapping functions.

Senator Chie further noted, "In the power sector, the government enacted a law that clearly vested policy setting in the Ministry of Mines and Energy, regulatory oversight in the Liberia Electricity Regulatory Commission (LERC), and left LEC as a commercial operator. Similarly, in the upstream petroleum sector, a new law established the Liberia Petroleum Regulatory Authority (LPRA) as the regulatory body, with NOCAL retaining commercial operations. However, no such reform has been enacted in the downstream sector."

The senator proposed that the Senate Committees on Public Corporations, Energy, Hydrocarbon & Environment, and Judiciary take the lead in conducting a national discourse. He urged the review of the LPRC's corporate charter of 1978 and the 1989 Act granting it exclusive rights over petroleum importation and distribution.

Senator Chie's recommendations include creating a new regulatory body or assigning regulatory responsibilities to an existing entity, vesting policy-setting authority in the Ministry of Mines and Energy, and confining the LPRC's role to commercial operations. Alternatively, he suggested transforming the LPRC into a regulatory authority while divesting it of commercial functions.

"The national discourse could deliver the LPRC as a regulatory authority but divest it of commercial operations functions in line with international best practice and the National Energy Policy," he stated.

Read the original article on Liberian Investigator.

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