Sen. Chie seeks policy reforms in petroleum sector
A new policy reform in the petroleum sector is expected to improve transparency and efficiency when established.
Grand Kru County Senator Albert Tugbe Chie proposes a national policy to unbundle the downstream petroleum sub-sector and the Liberia Petroleum Refining Company (LPRC) activities.
Speaking on Tuesday, January 21, 2025, after making his proposal in communication for the Sector Reform during the senate plenary, he said LPRC is acting as both referee and player in the management of the sub-sector as it is performing policy setting, regulatory oversight, and commercial operations roles.
"We propose a national discourse to unbundle the activities of the Liberia Petroleum Refining Company (LPRC), which controls the downstream petroleum sub-sector. Presently, the LPRC is acting as both referee and player in the management of the sub-sector as it is performing policy setting, regulatory oversight, and commercial operations roles," Senator Chie stated.
For example, he wondered how the LPRC can license importers of petroleum products and at the same time be an importer.
Senator Chie further queried, asking how the LPRC can set prices through the monthly petroleum prices circular for importers when it is also an importer.
He described this as an institutional conflict that creates an uneven playing field that can be a significant barrier to the growth of the private sector, the efficient delivery of high-quality and affordable energy services to the population, and just revenue intake to the Government.
" To ensure efficiency, productivity and cost-effective delivery of affordable energy services, international best practice dictates that the roles of policy setting, monitoring/regulatory oversight and commercial operations be housed in three distinct institutions, and not one institution or two institutions," Senator Chie asserted.
According to him, in the upstream petroleum sector, a new petroleum law was enacted that placed a regulatory oversight role with the Liberia Petroleum Regulatory Authority (LPRA) and Policy Setting with the Ministry of Mines and Energy, and NOCAL retained a role as a commercial operator.
However, Senator Chie lamented that in the downstream petroleum sector, the reform recommended by the National Energy Policy of 2009 has not taken place, and LPRC still has overlapping functions of referee and player.
" Distinguished Colleagues, it is my prayer to Plenary that the Senate Committees on Public Corporations; Autonomous Agencies; and Energy, Hydrocarbon & Environment, with support from the Committee on Judiciary, lead the national discourse through public hearing and other legislative processes such as the review of the LPRC corporate charter of 1978 and that of the 1989 "Act Granting Exclusive Right to LPRC for the Importation, sale, and distribution of Petroleum and Petroleum Products within the Republic of Liberia" he urged.
He stated that as a deliverable of the process, in line with the National Energy Policy of 2009, he looks forward to an unbundled and efficient downstream petroleum sector, with the creation of or a small but efficient entity to oversee regulatory activity or designation of that function to an existing entity other than the LPRC.
" Explicitly vesting policy setting functions in the Ministry of Mines & Energy or any other Government agency and committing the LPRC to a commercial operations function. Conversely, 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," Senator Chie stated.
Reflecting, he disclosed that in May 2009, the Government of Liberian published the "National Energy Policy and an Agenda for Action and Economic and Social Development."
However, he pointed out that the document stated, inter alla, that as a key national energy policy objective, the Government should amend existing legislation and create enabling laws to unbundle the activities of the Liberia Electricity Corporation (LEC) in the power sector, the activities of the National Oil company of Liberia NOCAL in the upstream petroleum sub-sector and those of the LPRC in the downstream petroleum sub-sector.
"Madam Presiding, since that time, in the power sector, the Government enacted a law that clearly vested policy setting in the Ministry of Mines & Energy, regulatory oversight in the Liberia Electricity Regulatory Commission (LERC), and LEC retained a role as a commercial operator" he noted. -Edited by Othello B. Garblah