NMDPRA unveils rules to curb petroleum market abuse

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…Proposes 138 regulations on competition across oil value chain

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By Obas Esiedesa, Abuja

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ABUJA — The Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, has unveiled proposed regulations aimed at curbing monopoly, abuse of market dominance, collusion and other anti-competitive practices in Nigeria’s petroleum midstream and downstream sectors.

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The proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations, 2026 are also designed to guarantee open and non-discriminatory access to critical petroleum infrastructure, improve market transparency and promote fair competition.

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Speaking at a stakeholders’ consultation forum on the regulations in Abuja, NMDPRA Chief Executive, Mallam Rabiu Umar, said the framework was being developed pursuant to Section 216 of the Petroleum Industry Act, PIA, 2021.

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Umar said the regulations would strengthen the sector by preventing anti-competitive practices, addressing abuse of dominance and promoting fair access to essential infrastructure.

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He said the Authority had received submissions from stakeholders on the draft and would consider their views before finalising the regulations.

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He said the proposed rules were intended to enhance transparency, market efficiency and certainty for investors while promoting innovation and competition.

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“This is therefore a consultation in the true sense of the word. We are here to listen, to learn and improve the draft where necessary,” Umar said.

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The NMDPRA chief also disclosed that the Authority had recently signed a Memorandum of Understanding, MoU, with the Federal Competition and Consumer Protection Commission, FCCPC, to strengthen competition regulation in the petroleum sector.

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He said the mandates of both agencies were complementary and that the agreement would improve regulatory coordination.

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Giving an overview of the draft, NMDPRA Secretary and Legal Adviser, Dr Joseph Tolorunse, said it contained 138 regulations across 23 parts, covering competition issues across the midstream and downstream petroleum value chain.

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He said the regulations would translate the competition provisions of the PIA into detailed and enforceable rules.

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According to him, the objectives include creating a level playing field, preventing monopoly and abuse of dominance, protecting consumers against collusion and market manipulation, guaranteeing open access to essential infrastructure and improving transparency in prices, capacity and market information.

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The proposed rules cover pipeline transportation, storage and terminals, wholesale petroleum liquids and gas, retail fuel distribution, petrochemicals and other related commercial activities.

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Tolorunse said owners or controllers of essential infrastructure, including pipelines, storage terminals, jetties, bulk-loading facilities and depots, would be required to provide qualified third parties access on transparent and non-discriminatory terms.

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Such access, he said, could only be restricted on legitimate technical, safety and creditworthiness grounds.

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The draft would also require operators to disclose tariffs, fees and general service conditions, while prohibiting hidden surcharges and undisclosed preferential arrangements.

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On collusion, Tolorunse said competing operators would be prohibited from coordinating pump prices, ex-depot prices, margins, discounts, freight charges, supply levels, territories, customer allocation and tender submissions.

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He said certain commercial arrangements, including exclusive supply agreements, long-term contracts, take-or-pay arrangements, tying and bundling, loyalty rebates and resale price maintenance, could also be subjected to competition scrutiny.

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On market dominance, Tolorunse clarified that the regulations would not prohibit a company from becoming dominant but would prohibit the abuse of such dominance.

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The draft also contains provisions covering vertically integrated operators, affiliates and intra-group transactions, including measures to prevent cross-subsidisation and ensure fair treatment of independent competitors.

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It further provides for competition reviews of mergers, acquisitions, changes in control and significant joint ventures.

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According to Tolorunse, the Authority would consider factors such as market concentration, barriers to entry, the elimination of actual or potential competitors, vertical foreclosure risks, consumer impact and control of essential facilities.

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The proposed regulations also address digital markets, market data and artificial intelligence-based pricing, particularly where digital platforms or algorithms could facilitate coordinated pricing or discriminatory access.

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Tolorunse said the framework would empower NMDPRA to undertake market monitoring, handle complaints, conduct investigations, gather information and impose interim measures, cease-and-desist orders and other corrective remedies.

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He, however, stressed the need to clearly define the relationship between NMDPRA and FCCPC, particularly on concurrent jurisdiction, merger reviews and enforcement.

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He said this would help prevent jurisdictional conflicts, duplication and regulatory uncertainty.

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Tolorunse said the proposed framework would make competition compliance an important consideration for petroleum operators in areas including contracts, pricing policies, infrastructure access, affiliate transactions, joint ventures, acquisitions and data sharing.

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He said the framework would expand petroleum regulation beyond licensing and technical operations to include how market power is exercised within the industry.

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Tolorunse noted that liberalisation under the PIA alone could not guarantee effective competition where an operator controlled critical pipelines, terminals, storage capacity, wholesale supply, market information or distribution networks.

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