The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has clarified that petrol pump prices are determined by market forces and not fixed by the regulator under the Petroleum Industry Act 2021. This statement was made in response to concerns over the recent increase in retail prices of Premium Motor Spirit across the country. The NMDPRA acknowledged the financial pressure caused by the latest increase in fuel prices, affecting households, transport workers, and businesses.
According to the NMDPRA, Section 205(1) of the Petroleum Industry Act provides that wholesale and retail prices of petroleum products should be based on unrestricted free-market pricing conditions. This means that the authority neither fixes petrol prices nor issues administrative price templates for petroleum products. The regulator's role is to ensure that operators comply with applicable laws and that consumers are protected from anti-competitive and exploitative practices.
The NMDPRA further explained that government intervention in petroleum pricing is limited to exceptional situations where there is formal evidence of a declared market failure, as stated in Sections 205(2) to 205(4) of the Act. However, no such market failure has been declared. Section 216 of the PIA empowers the authority to prevent anti-competitive practices, price-fixing, and abuse of market dominance.
The clarification comes amid growing concerns among consumers and businesses over the impact of rising petrol prices on transportation costs, household expenses, and operating costs. The NMDPRA stressed that deregulation does not remove regulatory obligations and that it is taking measures to safeguard the petroleum market and maintain supply stability.
To achieve this, the NMDPRA is conducting joint security operations with the Nigeria Customs Service and other relevant security agencies to strengthen surveillance along border corridors. These operations aim to curb the illegal diversion of petroleum products across Nigeria's borders and support stability in domestic fuel supply.
The regulator also established dedicated feedback and reporting channels for members of the public and industry stakeholders to report suspected irregular pricing and exploitative trade practices. Complaints received through these channels will be subjected to regulatory investigation, with enforcement action taken where necessary. The NMDPRA is working with the Federal Competition and Consumer Protection Commission to maintain joint surveillance of the market.
The authority reaffirmed its commitment to carrying out its statutory responsibilities under the Petroleum Industry Act, focusing on ensuring energy security, promoting fair competition, and protecting consumers within the existing legal framework. The NMDPRA's efforts aim to balance the need for a free market with the need to protect consumers from exploitation.
Key points
- Petrol pump prices determined by market forces under Petroleum Industry Act
- Government intervention in petroleum pricing limited to exceptional market failures
- NMDPRA conducts joint security operations to curb illegal diversion of petroleum products
