NMDPRA Proposes 138 Rules to Check Unfair Competition, Monopoly in Oil Sector

• Set to curb price-fixing, collusion, abuse of dominance

•Downstream regulator, FCCPC to deepen coordination

•New rules to scrutinise contracts, mergers, JVs, others

Emmanuel Addeh and Aminat Hassan in Abuja

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) yesterday announced that it was proposing 138 new regulations to rein in unfair competition, monopoly and abuse of market power in Nigeria’s midstream and downstream petroleum sector.

The proposed Midstream and Downstream Petroleum Prevention of Anticompetitive Practices and Behaviour Regulations, 2026, contained in 23 parts, the regulator explained, is an attempt to establish detailed competition rules for the industry.

The rules, if finalised, would prohibit a range of practices including price-fixing, collusion, market allocation, bid rigging, coordinated supply restrictions and the abuse of dominant positions.

They would also regulate access to critical petroleum infrastructure such as pipelines, storage terminals, jetties, bulk-loading facilities and depots, while imposing greater transparency requirements on tariffs, fees, capacity and other commercial information.

Speaking at a stakeholders’ consultation on the proposed regulations in Abuja, the NMDPRA Chief Executive, Rabiu Umar, said the framework was designed to strengthen competition while providing greater certainty for investors and protecting the integrity of the petroleum market.

“The proposed regulations are intended to strengthen the midstream and downstream petroleum sector by preventing anti-competitive practices, addressing abuse of dominance, promoting fair and non-discriminatory access in essential infrastructure, and also enhancing transparency and market efficiency,” he stated.

According to him, the Authority has received several submissions from its stakeholders regarding the proposed regulations, which will be reviewed to give industry stakeholders a chance to have an input.

“We particularly welcome your views on the clarity, practicality, and likely impact of the proposed regulations. We encourage participants to identify specific provisions that may require clarification or refinement and, where appropriate, suggest practical alternatives that can achieve the intended regulatory objectives,” he stated.

The Authority, he said, recognises that effective regulation must provide regulatory certainty, support investment and innovation, promote efficient markets and protect the integrity of the petroleum sector.

Umar stressed that the Authority had recently signed a Memorandum of Understanding (MoU) with the Federal Competition and Consumer Protection Commission (FCCPC) to strengthen regulatory coordination and fair market practices in the petroleum sector.

He said: “A few weeks ago we signed an MoU, a Memorandum of Understanding, with the FCCPC, which by law is also empowered to ensure that there are fair market practices in the country and in the sector. Our mandates are not necessarily conflicting.

“Our mandates are complementary. And as a result of that, we have signed an MoU with the FCCPC to make sure that we strengthen the regulatory environment as regards the petroleum midstream and downstream sector in the country.”

Giving an overview of the draft, the Authority Secretary and Legal Adviser to the Board, Joseph Tolorunse, said the proposed rules were intended to translate the competition provisions of the Petroleum Industry Act (PIA) 2021 into detailed and enforceable provisions specifically tailored to the midstream and downstream petroleum industry.

He explained that the framework went beyond conventional restrictions on price-fixing, covering infrastructure access, dominant firms, vertical integration, mergers, digital markets, enforcement, penalties, compliance and coordination between regulatory agencies.

Tolorunse said the regulations would effectively make competition protection a core component of petroleum regulation rather than leaving competition issues solely to general competition law.

“The foundation of the regime is Regulation 3, which prohibits any conduct, agreement, arrangement, understanding, decision, or practice that has the object or effect of preventing competition, restricting competition or distorting competition. This applies regardless of form, meaning both explicit agreements and informal practices are captured,” he said.

A significant aspect of the proposed framework, the overview showed, is its attempt to prevent companies from using control of critical infrastructure to shut out competitors from the market.

Under the rules, owners or controllers of essential petroleum infrastructure, including pipelines, storage terminals, jetties, bulk-loading facilities and depots, would be prohibited from unjustifiably refusing, delaying or obstructing access by qualified third parties.

Access, the Authority said, must be transparent and non-discriminatory and based only on legitimate technical, safety and creditworthiness considerations. The proposed regulations would also impose extensive transparency obligations on operators providing midstream and downstream services.

They would be required to publish tariffs, fees and general service conditions, while hidden surcharges, secret discounts, undisclosed preferential arrangements and informal side agreements capable of altering published access conditions would be prohibited.

According to Tolorunse, the provisions are designed to ensure that operators compete on a level playing field rather than allowing control of infrastructure or commercial information to become a barrier to entry.

The proposed framework also takes direct aim at coordination between competitors. Operators would be prohibited from coordinating pump prices, ex-depot prices, margins and discounts, freight charges, supply or output levels, territories, customer allocation and tender submissions.

Tolorunse said arrangements including exclusive supply agreements, long-term contracts, take-or-pay provisions, tying and bundling, loyalty rebates, minimum-volume commitments, resale price maintenance and franchise restrictions could be scrutinised where they substantially lessen competition.

He explained that the focus would not necessarily be on the existence of such contracts but on whether they foreclosed market access or distorted competitive conditions. The proposed rules would also make a distinction between market dominance and the abuse of dominance.

“The regulations do not prohibit dominance itself. They prohibit abuse of dominance, meaning conduct that harms competition or exploits market power,” Tolorunse said.

The proposed rules equally venture into digital markets, with the Authority seeking to regulate emerging competition risks associated with market data, shared platforms, dominant digital platforms, competitively sensitive information and consumer data.

“This is important because digitalisation can facilitate competition but can also make coordinated pricing, information exchange and discriminatory market access much easier,” the NMDPRA stated in the overview.