morganable politics/policy
The move comes amid growing concerns over pricing practices in the downstream petroleum market
KaNo—
The Federal Government has taken steps to strengthen competition in Nigeria’s petroleum industry, unveiling a sweeping regulatory framework aimed at curbing monopolistic practices in the midstream and downstream segments of the sector.
The proposed rules, developed by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, seek to tackle fuel price fixing, market sharing, abuse of dominance and discriminatory access to critical infrastructure, while promoting transparency and efficiency across the value chain.
Titled Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations, 2026, the framework is one of the most comprehensive competition-focused interventions since the enactment of the Petroleum Industry Act 2021.
The draft regulations were first released for public consultation on August 6, 2026, with stakeholders given 21 days to submit comments.
The consultation process, mandated under Section 216(1) of the PIA, reflects the government’s effort to incorporate industry feedback before finalising the rules.
The move comes amid growing concerns over pricing practices in the downstream petroleum market.
In recent months, independent marketers alleged that some major fuel importers engaged in coordinated pricing of Premium Motor Spirit, selling at rates above those of the Dangote Petroleum Refinery, raising questions about competition and market fairness.
Speaking at a stakeholders’ consultation forum in Abuja on Tuesday, the Chief Executive of the NMDPRA, Rabiu Umar, said the proposed framework was designed to create a level playing field for operators while safeguarding consumer interests.
He noted that the regulations would address systemic issues that undermine competition, including the concentration of market power and opaque pricing mechanisms.
“The proposed regulations are intended to strengthen the midstream and downstream petroleum sector by preventing anti-competitive practices, addressing abuse of dominance, promoting fair and non-discriminatory access in essential infrastructure, and enhancing transparency and market efficiency,” Umar said.
He added that the consultation forum provided an opportunity for stakeholders to highlight areas requiring clarification and propose practical alternatives that align with the objectives of the regulations.
According to the NMDPRA Legal Adviser, Joseph Tolorunse, the draft framework comprises 138 regulations across 23 parts, covering a broad range of competition-related issues beyond conventional price-fixing prohibitions.
Tolorunse explained that the rules extend to infrastructure access, market dominance, vertical integration, mergers and acquisitions, digital markets, enforcement mechanisms and penalties.
“The central purpose of the Regulations is to translate the competition provisions of the Petroleum Industry Act 2021 into detailed, enforceable rules for the midstream and downstream petroleum sectors,” he said.
Under the proposed regime, petroleum companies would be barred from coordinating pump prices, ex-depot prices, margins, freight charges, supply levels and customer allocation.
The rules also prohibit collusion in tender submissions and market-sharing arrangements.
Notably, the framework goes beyond formal agreements to include tacit or informal coordination.
This means that companies could face sanctions even where anti-competitive conduct is not documented in written contracts but inferred from patterns of behaviour or communication.
The regulations also target owners of critical infrastructure such as pipelines, storage terminals, depots and jetties.
Operators would be required to grant third-party access on transparent and non-discriminatory terms, subject only to legitimate considerations such as safety, technical capacity and creditworthiness.
In addition, infrastructure owners would be mandated to publish tariffs, fees and service conditions, while hidden charges, secret discounts and preferential arrangements would be prohibited.
Industry analysts say this provision could significantly reshape market dynamics by reducing barriers to entry and enabling smaller operators to compete more effectively.
However, the proposed rules have drawn mixed reactions from stakeholders, particularly regarding their potential impact on long-term contracts.
Some industry players argue that strict scrutiny of exclusive agreements and long-term supply arrangements could discourage investment in a capital-intensive sector where operators require predictable revenue streams to recover costs.
They warned that an overemphasis on short-term flexibility could undermine financing structures for large-scale infrastructure projects.
Tolorunse acknowledged these concerns, noting that while the regulations would examine arrangements such as take-or-pay contracts, loyalty rebates and minimum-volume commitments, such agreements would not be outrightly prohibited.
Instead, they would be assessed on a case-by-case basis to determine whether they substantially reduce competition or restrict market access.
He emphasised that market dominance itself is not illegal under the framework, but its abuse would attract regulatory sanctions.
The draft regulations also introduce a competition review process for mergers, acquisitions and joint ventures in the petroleum sector.
The NMDPRA would evaluate transactions based on factors such as market concentration, barriers to entry, control of essential infrastructure and potential impact on consumers.
Another key feature of the framework is the regulation of digital markets and algorithmic pricing. With increasing reliance on data-driven decision-making, the Authority aims to prevent the misuse of artificial intelligence and sensitive market information to facilitate collusion or unfair pricing practices.
Tolorunse said the rules would address issues related to dominant digital platforms, data sharing and pricing algorithms, ensuring that technological innovation does not come at the expense of competition.
To enhance enforcement, the NMDPRA is also strengthening collaboration with the Federal Competition and Consumer Protection Commission, which has a broader mandate to promote fair competition across all sectors of the economy.
Umar disclosed that both agencies recently signed a Memorandum of Understanding to facilitate information sharing, market intelligence and coordinated enforcement actions.
“Our mandates are complementary,” he said.
“The collaboration will ensure that we strengthen the regulatory environment in the petroleum midstream and downstream sector.”he added.
The agreement, signed on September 10, is expected to reduce regulatory overlaps and improve the effectiveness of competition oversight in the industry.
Experts say the success of the proposed regulations will depend on their implementation and the ability of regulators to balance competition with investment incentives.
While the framework has been widely welcomed as a step toward greater transparency and accountability, stakeholders insist that clarity and consistency in enforcement will be critical to achieving its objectives.
As consultations continue, the Federal Government faces the challenge of addressing industry concerns while maintaining its commitment to fostering a competitive and efficient petroleum market.
