Monrovia – Grand Kru County Senator Albert Chie has called on the Liberian Senate to review and unbundle the responsibilities of the Liberia Petroleum Refining Company (LPRC), arguing that such a move would enhance the country’s energy sector without disrupting the company’s core functions.
By Trokon Wrepue, contributing writer
In a communication to the Senate, the former Pro-Tempore contended that the LPRC currently serves as both regulator and operator, effectively making it the “player and the referee.” He stressed the need to remove certain regulatory functions from the state-owned entity, citing international best practices where policy oversight, regulatory oversight, and operations are handled by separate institutions.
“For international best practices, these functions should be housed in three distinct institutions, not one. It is against international best practices,” Senator Chie stated during a Senate hearing on Thursday, February 13, 2024.
He proposed that the downstream petroleum sector be unbundled and a separate regulatory body be created, similar to reforms in other energy-related institutions like the Liberia Electricity Corporation (LEC) and the National Oil Company of Liberia (NOCAL).
LPRC Managing Director Rejects Proposal
However, LPRC Managing Director Amos Tweh strongly opposed the senator’s proposal, emphasizing that the company’s dual role as a regulator and a national strategic asset is vital for Liberia’s energy security, job creation, and economic stability.
“While LPRC does not import petroleum products, private importers currently control nearly 100% of the petroleum supply in Liberia. Despite this, LPRC, as a government institution, employs over 900 Liberians,” MD Tweh stated.
He noted that LPRC provides more employment than all private sector players combined in the downstream petroleum industry, making it a critical economic pillar for many families and communities.
Why LPRC’s Role Should Remain Unchanged
MD Tweh argued that maintaining LPRC’s current functions is essential for national security, price stability, and economic resilience.
He warned that stripping LPRC of its regulatory authority would limit government oversight, weaken market participation, and expose Liberia to potential crises, particularly in the event of market disruptions caused by private companies prioritizing profits over national interests.
“Honorable Senators, a diversified LPRC ensures effective government oversight in critical sectors and prevents total reliance on private importers, who may prioritize profits over the national interest,” MD Tweh asserted.
He pointed to the 2020 fuel crisis, where the lack of proper regulation allowed private entities to control petroleum imports, leading to fuel shortages and economic disruptions.
“The 2020 fuel crisis demonstrated the dangers of an unregulated market. If LPRC is weakened, Liberia could face similar crises in the future,” he warned.
Comparing Regional Experiences
The LPRC Managing Director cited an unnamed neighboring country that fully privatized its downstream petroleum sector, resulting in persistent fuel shortages. He used this as a cautionary example, urging Liberia not to make the same mistake.
“That country is now facing frequent petroleum shortages because it handed over its entire downstream sector to private players. This is why it is important to have a national institution that not only regulates but ensures the availability and affordability of petroleum products in Liberia,” he explained.
He emphasized that fuel security remains a major priority for the Boakai-Koung administration, and the LPRC must retain its full mandate to prevent national embarrassment.
Job Loss and Economic Implications
MD Tweh warned that reducing LPRC’s scope would result in significant job losses, with at least 500 employees at risk of losing their jobs.
“Reducing LPRC’s operations will undoubtedly lead to massive job losses. We cannot afford to downsize our workforce at a time when economic stability is a key priority,” he stressed.
Additionally, he pointed out that LPRC currently controls only 29% of the country’s petroleum storage capacity, while private terminal owners control 71%. He argued that rather than stripping LPRC of its authority, the government should consider expanding its role in importation and regulation to strengthen fuel security.
With the debate ongoing in the Senate, the future of LPRC’s regulatory role remains uncertain. However, MD Tweh’s argument highlights the potential economic and security risks of unbundling the company’s operations.
As lawmakers deliberate, the key question remains: Should Liberia follow international best practices by separating regulation and operations, or should it maintain LPRC’s dual role to safeguard jobs and national security?
