Operators that control critical petroleum infrastructure could face tighter scrutiny under a proposed regulatory framework by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), as the agency moves to tackle monopoly, market dominance, collusion and other practices capable of restricting competition in the sector.
The proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations, 2026 seek to establish clearer rules for competition across Nigeria’s petroleum midstream and downstream value chain, while ensuring that businesses have fair access to essential infrastructure.
The framework is also expected to improve transparency in pricing, infrastructure capacity and other market information, as well as provide safeguards against arrangements that could give some operators unfair advantages over competitors.
Speaking at a stakeholders’ consultation forum on the proposed regulations in Abuja, the NMDPRA Chief Executive, Mallam Rabiu Umar, said the initiative was being developed pursuant to Section 216 of the Petroleum Industry Act (PIA), 2021.
Umar said the proposed framework was intended to strengthen competition while creating a more predictable operating environment for investors and businesses in the petroleum industry.
“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 to essential infrastructure, and also enhancing transparency and market efficiency.”
He said the consultation was designed to obtain industry input before the regulations are finalised, adding that the Authority had already received submissions from stakeholders.
“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.
The NMDPRA chief executive further said effective regulation should provide certainty for investors while encouraging innovation, supporting efficient markets and preserving the integrity of the petroleum sector.
NMDPRA, FCCPC strengthen collaboration
The proposed regulations come against the backdrop of efforts by the NMDPRA and the Federal Competition and Consumer Protection Commission (FCCPC) to strengthen coordination on competition matters in the petroleum industry.
Umar disclosed that the two agencies had recently signed a Memorandum of Understanding (MOU) aimed at strengthening the regulatory framework for competition in the sector.
He said the mandates of the NMDPRA and FCCPC were complementary and that greater coordination between the agencies would help improve regulatory effectiveness.
The issue of regulatory coordination is particularly significant under the proposed framework, given the possibility of overlapping responsibilities in areas such as competition enforcement, mergers and acquisitions.
138 regulations across 23 parts
Giving an overview of the proposed rules, the NMDPRA Secretary and Legal Adviser, Dr Joseph Tolorunse, said the draft comprises 138 regulations across 23 parts, covering competition-related issues throughout the midstream and downstream petroleum value chain.
According to him, the proposed regulations are intended to translate the competition provisions contained in the PIA into detailed rules that can be enforced across the industry.
The objectives include creating a level playing field for operators, preventing monopoly and abuse of dominance, protecting consumers from collusion and market manipulation, ensuring open and non-discriminatory access to essential infrastructure, and improving transparency around prices, capacity and other market information.
The proposed rules would apply to a broad range of activities, including pipeline transportation, storage and terminals, wholesale petroleum liquids and gas, retail fuel distribution, petrochemicals and other related commercial activities.
Infrastructure owners face access requirements
One of the key areas covered by the proposed framework is access to critical petroleum infrastructure.
Owners or controllers of essential facilities such as pipelines, storage terminals, jetties, bulk-loading facilities and depots would be required to provide access to qualified third parties on transparent and non-discriminatory terms.
Such access could only be restricted on legitimate grounds relating to technical requirements, safety or the creditworthiness of an applicant.
The proposal could therefore have implications for operators whose control of infrastructure gives them significant influence over the ability of competitors to participate in particular markets.
The draft regulations would also require operators providing midstream and downstream services to disclose tariffs, fees and general service conditions.
Operators would be barred from imposing undisclosed charges, offering preferential arrangements that are not transparently available or entering into informal agreements capable of changing published access conditions.
Rules target price and supply collusion
The proposed regulations also contain provisions aimed at preventing competitors from coordinating their commercial activities in ways that could undermine competition.
Tolorunse said operators would be prohibited from coordinating pump prices, ex-depot prices, margins, discounts, freight charges, supply levels, territories, customer allocation and tender submissions.
The draft would also allow competition scrutiny of certain petroleum contracts and commercial arrangements where they could substantially restrict competition.
Among the arrangements identified are exclusive supply agreements, long-term contracts, take-or-pay arrangements, tying and bundling arrangements, loyalty rebates, minimum-volume commitments, resale price maintenance and certain franchise restrictions.
Dominance itself not prohibited
Tolorunse stressed that the proposed regulations would not prevent a company from becoming dominant in a particular market.
Rather, the focus would be on preventing companies from abusing a dominant position.
The distinction is significant because market dominance can arise through legitimate business success, investment or efficiency. Under the proposed framework, the regulatory concern would be how such market power is exercised and whether it is used to exclude competitors or otherwise undermine effective competition.
The draft also addresses vertically integrated companies, affiliated businesses and intra-group transactions, with provisions intended to ensure fair treatment of independent competitors and prevent cross-subsidisation.
Mergers, acquisitions to face competition review
The proposed framework would further provide for competition reviews involving mergers, acquisitions, changes in control and significant joint ventures.
According to Tolorunse, the Authority would consider a range of factors when assessing such transactions, including market concentration, barriers to entry, the elimination of existing or potential competitors, risks of vertical foreclosure, consumer impact and control over essential facilities.
This means major transactions within the midstream and downstream petroleum sectors could be examined not only for their commercial implications but also for their potential effect on competition.
Digital markets, AI pricing included
The draft regulations also venture into emerging areas of competition policy by including provisions dealing with digital markets, market data and artificial intelligence-based pricing.
The inclusion reflects concerns about the possibility that digital platforms and pricing algorithms could be used to facilitate coordinated pricing, restrict access or discriminate between market participants.
As petroleum businesses increasingly rely on digital systems for pricing, transactions, data management and market intelligence, the proposed provisions seek to extend competition oversight to these emerging practices.
NMDPRA proposes enforcement powers
Under the proposed framework, NMDPRA would have powers relating to market monitoring, complaints, investigations and information gathering.
The draft also provides for interim measures, cease-and-desist orders and corrective remedies where violations are established.
However, Tolorunse stressed that the relationship between NMDPRA and the FCCPC would need to be clearly defined, particularly in matters involving concurrent jurisdiction, merger reviews and enforcement.
He said greater clarity would be necessary to avoid jurisdictional conflicts, duplication of regulatory functions and uncertainty for businesses operating in the sector.
Competition compliance to become central
Tolorunse said the proposed regulations would make competition compliance an increasingly important consideration for petroleum operators.
Businesses would need to take the competition rules into account in areas such as commercial contracts, pricing policies, infrastructure-access procedures, transactions involving affiliates, joint ventures, acquisitions and data-sharing arrangements.
The proposed framework, he noted, would broaden the scope of petroleum regulation beyond licensing and technical operations to include the manner in which market power is exercised.
He argued that liberalisation under the PIA, by itself, could not guarantee effective competition where a single operator controls critical pipelines, terminals, storage capacity, wholesale supply, market information or distribution networks.
The ongoing consultation is expected to provide stakeholders with an opportunity to raise concerns, suggest amendments and seek clarification on the proposed rules before the NMDPRA moves to finalise the regulations.