FG targets tougher rules to curb monopoly, market abuse in petroleum sector

The Federal Government in Nigeria aims to establish stricter regulations to curb monopoly and market abuse within the midstream and downstream petroleum sector. To achieve this, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has introduced the proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations, 2026.

This draft regulation seeks to address issues such as fuel price fixing, market sharing abuse, dominance, discriminatory access to vital infrastructure, and the use of pipelines, terminals, storage facilities, pricing information, commercial contracts, and digital platforms by petroleum companies.

However, some stakeholders have expressed concerns about the draft, arguing that it could dissuade long-term contracts. They believe that short-term agreements, though unsuitable for a capital-intensive industry, are often necessary for investors to recover their investments. The draft regulations were officially released for public consultation on August 6, 2026, following a requirement under Section 216(1) of the Petroleum Industry Act 2021, which mandates the Authority to engage with stakeholders prior to finalizing regulations.

The proposed rules come in response to growing concerns about coordinated pricing in the downstream petroleum market. In July, independent marketers alleged that certain major fuel importers were selling Premium Motor Spirit at prices higher than those of the Dangote Petroleum Refinery. During a stakeholders' consultation forum in Abuja, NMDPRA Chief Executive Rabiu Umar emphasized that the framework's objective was to create a more transparent and efficient petroleum market while safeguarding investors and consumers.

The NMDPRA Legal Adviser, Joseph Tolorunse, explained that the regulations cover 138 provisions across 23 parts, which encompass a wide range of issues beyond traditional price-fixing restrictions. These provisions include infrastructure access, dominant firms, vertical integration, mergers, digital markets, enforcement, penalties, compliance, and inter-agency coordination.