The Petroleum Regulatory Agency (PRA) was enacted by Act of Parliament in 2014, with the Statutory Instrument of 2016 to regulate the Downstream Petroleum Sector which includes refining, storage, importation, bunkering, transportation, distribution, retailing, etc. of operators and also work with relevant stakeholders to determine an affordable and efficient pump prices across the country.
The Agency is headed its Executive Chairman, Brima Baluwa Koroma, a former banker from one the reputable international banks –Standard Chartered from the UK. After his banking days, he served as Manager at Safecon, and then took over the reigns at PRA following his appointment in 2018 by President Bio. He took over at a time when the petroleum industry was shaky and unpredictable, a situation which was further exacerbated by COVID 19 and the Russia-Ukraine war. However, the new PRA boss kept a cool head and soldiered on by keeping a fine balance between dealers and consumers of petroleum products in the country. He has made his mark for excellently managing his staff to perform at the highest level. He has also been recognized for his philanthropic work with challenged communities across the country.
The Agency is one of the most efficient and service deliverable agencies under the current dispensation. It has exponentially increased petroleum revenues for the government. For an industry that is marred by speculations and hoarding, the Agency ensures Oil Marketing Companies (OMCs) comply with standards and procedures.
In 2018, the Agency recorded 340.01 metric tons, sales 409.04 million liters and Le,473billion was generated as revenue and in 2019 it recorded imports of 395.22metri tons, sales 407.91 million liters and generated Le743.03 billion.
In 2020, PRA recorded 435.96 metric tons, sales 416.08million liters and generated Le, 753.79 billion. In 2021, the agency recorded 485.92 of metric tons on imports, sales 503.42 million liters and revenue generated was Le, 689,51 Bn. In 2022, the agency recorded 476.46 metric tons and sales 494.81 million liters while revenue generated was Le,767.14 Billion.
In 2023, the agency recorded 506.22 metric tons on imports, sales 512.63 million liters and revenue generated was Le 1.082.76 1 trillion
In 2020, the Agency recruited District Monitoring Officers (DMOs)in all sixteen (16) districts in Sierra Leone who are now supporting the Agency to monitor, sensitize and enforce its mandates in terms of Price Uniformity, Anti-Smuggling, Hoarding, Health Safety and Environment etc. The Field Monitoring Officers ensure daily installations petroleum stock monitoring. This robust monitoring and inspections have recorded improved compliance to our petroleum laws and enhanced revenue generation. There are dedicated Regional Managers to coordinate the activities of the District Monitors in all regions including two newly established regional offices in Kenema and Makeni while plans are on the way to open Northwest Regional office in Port Loko in the first quarters of 2024.
As an investment friendly regime, during the heights of global economic shock, the government further committed itself for oil marketing companies to seamlessly recoup the reported operational losses in excess of Le110bn or U$D11m. This recovery enhanced business confidence, foster industry growth and improved service delivery. Between 2020 and 2022 over Le600bn has been injected into the sector as direct and indirect subsidies, with approximately USD120million in 2022 alone as foreign exchange support.
These interventions are geared towards cushioning the harsh global impact on the consumers in Sierra Leone positioning the country pump prices as lowest in the Sub-Region most of the times.
In the face of such global uncertainties; government has opportunities for a choice among the many policy options. As another demonstration of clear commitment, the government of President Dr Julius Maada Bio has considered the participation of government in the petroleum downstream with the key objective of supporting the operators, mitigating external shocks and supply chain disruptions. In December 2022, cabinet approved the Sales Purchase Agreement and the directive to establish a state owned petroleum authority with the mid-term view of establishing a petroleum strategic stock.
The investment policy of the government has attracted so many investors within the value chain including petroleum importation, tank farm, and retailing. This happened as a result of the proactive and smart regulator. There are administrative measures that are currently being put in place despite the seeming geopolitical tension that is continuously posing huge threats to the sector.
The Downstream Petroleum Sector has exceptionally been transformed to a very fascinating and enviable institution with huge reforms being instituted by the astute and result-oriented Executive Chairman, Mr. Brima M. Baluwa Koroma for his indelible legacies that will transform the industry to match the status of international standard.
Economically, the Downstream Petroleum Sector is one of the most critical and complex sectors contributing about 15% to the domestic revenue basket. PRA is one of the major contributors in the economy sector; for every Le,1 directly contributed to the Gross Domestic Product (GDP) and there is an additional Le, 1 supported elsewhere within the economy through the value chain.
There are over 406 BRV’s creating over 4,100 direct jobs and over 2,859 indirect jobs generating significant amount to create total economic impact. Based on the current run-rate and if the economic growth is sustained, the petroleum market will out-grow by over 6% annually and revenue will be re-double potentially making the sector to attain Le, 1 trillion revenue department in due course with efficient and committed administration at PRA. In December, 2023, the Agency hit 1 trillion as revenue for the government making it more attractive and compelling.
Petroleum Regulatory Agency has attracted huge private investors’ participation in the sector in recent times especially in the area of importation and the establishment of gas stations across the country. Thus, which will help free-up the market with an enabling environment so that remote places will not be challenged any longer in securing petroleum products for their domestic usage.
Baluwa Koroma inherited the Agency with 202 gas stations operating within the country. Today, the industry can proudly boost of having over 415 gas stations nationwide that will help to mitigate some of the bottlenecks in the Downstream Petroleum Sector and also reduce energy poverty in the country as more people have access to petroleum products.
Government had provided conducive environment for the transformation of the sector which eventually led to the construction of a modern tank farm at the dilapidated Kissy Old Refinery into a state of the earth tank farm that will deliver over 60,000 metric tons storage capacity. This additional tank will not only improve on the national petroleum storage capacity, but will also enhance the replenishment period at the agency.
The government, through the Agency, is profoundly putting modalities in place in order to ensure that government participates in the Downstream Petroleum Sector which will change the narrative for efficient and effective service delivery in the sector.
It is very unprecedented that government will be maintaining strategic petroleum stock; countries with high dependencies on petroleum import are vulnerable to global shock and political risks. Therefore, the tank farm at the Kissy Old Refinery constructed by APP will be designed to reserve huge quantities of petroleum products on behalf of government as strategic stock. This aims at ensuring fuel availability in Sierra Leone, prepare the government against oil supply interruption and increase fuel storage capacity for petroleum products.
It is very apparent that fuel is being generally considered as a political commodity, which has the tendency to make any government unpopular. But despite the volatility and unpredictability of the sector, which sometimes affects both producers and importers, The Executive Chairman has been able to make fuel a necessity in the country regardless of the fact that Sierra Leone being a net importing country with private sector dominance.
Before this time, the Agency used to rely on third parties to determine local pump prices (Platts). As a vibrant and productive Agency, PRA lobbied with the government profoundly to have its own PLATTS. As of today, PRA is the only direct subscriber of PLATTS for petroleum products in Sierra Leone. The Agency monitors Platts prices on daily basis.
The Agency is primarily saddled with the mandates to license, regulate, refine, store, transport and distribution of petroleum products in a timely manner. However, it does not import petroleum products as has always been viewed by the public.
To put a robust stop forthwith to fuel hoarding which normally creates panic and artificial scarcity in the market, PRA now undertakes daily dipping for all petroleum terminals to ensures adequate stock and effective distribution across the country.
The Agency had sanctioned dealers with heavy fines and cancellation of licenses for hoarding which creates artificial scarcity and panic.
For Inspections and technicalities, the Executive Chairman deemed it prudent to establish an Engineering Department that will guide private investors with the technical specifications and requirements for operating a gas station. Therefore, no sooner PRA is contacted for the establishment of gas station with a letter of intent; the Engineering Department visits the site and proffers professional and technical advice before the construction of the gas station. These are all innovative ways to ensure compliance that meet the standard of international best practices.
The petroleum regulatory landscape has evolved over the past few years under the New Direction’s government; this has also produced a more substantial sets requirement. As part of its ongoing apparent industry reforms and transformation, PRA has developed and introduced guidelines for major downstream activities including: the construction of gas stations, importation of petroleum products, traders’ license requirements, bulk road vehicles, transshipment and bulk storage.
Consequently, these guidelines set out the position of the Agency on regulatory compliance. The roles and responsibilities of different operators, the objective is to make positive differences to end users and clarify our compliance and enforcement principles, approaches and expectations.
Copyright –Published in Expo Magazine, February Edition, Vol.2, No.2, 2024 (ExpoTimes News – Expo Media Group (expomediasl.com)
