NMDPRA Decries N1,500 Petrol, Says Pricing Governed By Unrestricted Free Market Provisions in PIA

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has expressed concerns over the recent surge in petrol prices, which have reached a record high of N1,500 per litre in various parts of Nigeria. The pricing of petroleum products in the downstream sector is determined by the unrestricted free market principles outlined in the Petroleum Industry Act (PIA).

Although the price hike has caused financial strain on consumers and businesses, the NMDPRA maintains that its primary role is to regulate the market, protect consumers, and ensure fair competition, rather than directly set prices. Section 205(1) of the PIA 2021 stipulates that wholesale and retail prices of petroleum products should be determined by unrestricted free market conditions.

Recent global crude oil price increases, with benchmarks surpassing $100 per barrel, are primarily responsible for the recent price surge. As a result, labour unions have called for government interventions, and transporters in major commercial areas have raised public transit fares by 30 to 50 percent. However, the NMDPRA asserts that government intervention in petroleum pricing is limited to exceptional circumstances with formal evidence of market failure.

The authority is working with the Nigeria Customs Service and other security agencies to prevent illegal diversion and smuggling of petroleum products and is collaborating with the Federal Competition and Consumer Protection Commission to monitor the market for price-gouging, collusion, under-dispensing, and compromised product quality.