The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has proposed sweeping rules to regulate the petroleum sector, targeting anti-competitive practices, monopoly, and market abuse. The proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations, 2026, aims to create a more transparent and efficient petroleum market. The regulations will cover various aspects, including pipeline usage, terminals, storage facilities, pricing information, commercial contracts, and digital platforms.
The proposed regulations were released for public consultation on August 6, 2026, with stakeholders invited to submit comments within 21 days. The consultation was undertaken pursuant to Section 216(1) of the Petroleum Industry Act 2021, which requires the Authority to consult stakeholders before finalising its regulations. The notice came shortly after concerns were raised in the downstream petroleum market over alleged coordinated pricing by some fuel importers.
Some stakeholders have raised concerns about the draft, arguing that it could discourage long-term contracts. They said short-term agreements may not be suitable for a capital-intensive sector where investors need sufficient time to recover their investments. The NMDPRA Chief Executive, Rabiu Umar, said the framework was designed to protect investors and consumers while promoting a more transparent and efficient petroleum market.
The proposed framework contains 138 regulations across 23 parts, according to the NMDPRA Legal Adviser, Joseph Tolorunse. The rules go beyond conventional price-fixing restrictions to cover infrastructure access, dominant firms, vertical integration, mergers, digital markets, enforcement, penalties, and coordination between regulatory agencies. The regulations aim to translate the competition provisions of the Petroleum Industry Act 2021 into detailed, enforceable rules for the midstream and downstream petroleum sectors.
Under the proposed rules, companies would be prohibited from coordinating pump prices, ex-depot prices, margins, discounts, freight charges, supply levels, territories, customers, and tender submissions. The draft also targets informal or tacit agreements, meaning companies could face regulatory scrutiny even where anti-competitive conduct is not contained in a formal written agreement. The regulations would also prohibit owners or controllers of essential infrastructure from unjustifiably denying or delaying access to qualified third parties.
The proposed rules come against the backdrop of renewed concerns over competition and pricing in the downstream petroleum market. The PIA already provides the statutory foundation for competition regulation in the midstream and downstream sector, empowering the NMDPRA to consider whether conduct substantially lessens competition, facilitates discriminatory practices, restricts market entry, or amounts to abuse of market power. The new regulations would build a more detailed sector-specific competition regime around those provisions.
The proposed regulations also provide for competition review of mergers, acquisitions, changes in control, and significant joint ventures, with the NMDPRA considering issues such as market concentration, barriers to entry, foreclosure risks, control of essential infrastructure, and effects on consumers and innovation. The framework would scrutinise exclusive supply agreements, long-term contracts, take-or-pay arrangements, tying and bundling, loyalty rebates, minimum-volume commitments, resale price maintenance, and franchise restrictions where such arrangements could substantially reduce competition.
Key points
- The Federal Government aims to strengthen competition in Nigeria's midstream and downstream petroleum sector with proposed rules to curb monopoly and market abuse.
- The proposed regulations target anti-competitive practices, including price fixing, market allocation, bid rigging, and coordinated supply restrictions.
- The regulations would prohibit owners or controllers of essential infrastructure from unjustifiably denying or delaying access to qualified third parties.
