The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has commenced consultations with industry stakeholders on proposed regulations aimed at preventing anti-competitive practices and behaviour in Nigeria’s midstream and downstream petroleum sector.
The proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations, 2026 are being developed pursuant to Section 216 of the Petroleum Industry Act (PIA), 2021.
The regulations are designed to strengthen competition in the sector by addressing practices such as abuse of market dominance, discriminatory access to essential petroleum infrastructure, collusion, market manipulation and other conduct capable of restricting or distorting competition.
The consultation forum, held at the NMDPRA Headquarters in Abuja, provided stakeholders with an opportunity to examine the proposed framework and make submissions on its clarity, practicality and potential impact on businesses and consumers.
Welcoming participants on behalf of the Authority Chief Executive, Rabiu Abdullahi Umar, Executive Management and staff of NMDPRA, the Executive Director, DSSRI and Chairman of the Technical Team on the stakeholders’ engagement, Mr Ogbugo Kalu Ukoha said the consultation was intended to ensure that the final regulations reflected practical realities in the petroleum industry.
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The Authority said it had received several submissions from stakeholders on the proposed regulations, which were being reviewed as part of the consultation process.
The NMDPRA stressed that effective regulation should provide certainty for investors and operators while promoting innovation, efficient markets and the integrity of the petroleum sector.
The Authority also urged stakeholders to identify provisions that required clarification or refinement and to propose practical alternatives where necessary to achieve the objectives of the regulations.
Providing an overview of the draft regulations, the Authority Secretary and Legal Adviser to the Board, Dr Joseph Tolorunse, described the proposed instrument as a competition-law framework specifically designed for Nigeria’s midstream and downstream petroleum industry.
According to him, the regulations contain 138 regulations across 23 Parts, covering a wide range of issues including infrastructure access, abuse of dominance, vertical integration, mergers and acquisitions, digital markets, enforcement, penalties, compliance and inter-agency coordination.
He explained that the central objective was to translate the competition provisions of the Petroleum Industry Act into detailed and enforceable rules applicable to the midstream and downstream petroleum sectors.
The regulations, he said, seek to create a level playing field, prevent monopoly and abuse of dominance, protect consumers from collusion and market manipulation, guarantee open and non-discriminatory access to essential infrastructure, improve transparency of prices and market information, attract investment and align Nigeria’s petroleum competition regime with international practice.
Areas of the petroleum industry to be affected
The proposed framework covers a broad range of activities, including petroleum transportation through pipelines, storage and terminals, wholesale petroleum liquids and gas, retail fuel distribution, petrochemicals and other related commercial activities.
It would apply to licensees, permit and authorisation holders, affiliates and other persons engaged in commercial activities in the sector, including industry associations where their activities have implications for competition.
This means that competition considerations could become an integral part of petroleum-sector operations rather than an issue confined to general competition law.
The regulations Will address anti-competitive conduct
At the heart of the proposed framework is Regulation 3, which establishes a broad prohibition against conduct, agreements, arrangements, understandings, decisions or practices that have the object or effect of preventing, restricting or distorting competition.
The proposed provision is not limited to formal written agreements.
Informal understandings or practices that produce anti-competitive effects could also come under regulatory scrutiny.
Issues of operators and equal access to pipelines, terminals and depots
One of the key questions addressed by the proposed regulations is access to essential petroleum infrastructure.
According to the NMDPRA, owners or controllers of essential facilities such as pipelines, storage terminals, jetties, bulk-loading facilities and depots would not be permitted to unjustifiably refuse, delay or obstruct access by qualified third parties.
Access would be expected to be transparent and non-discriminatory and based on legitimate considerations such as technical requirements, safety and creditworthiness.
The proposal is therefore intended to prevent the control of critical infrastructure from being used to unfairly exclude competitors from the market.
Making petroleum pricing and tariffs more transparent
The draft regulations also introduce provisions requiring operators providing midstream and downstream services to publish tariffs, fees and general service conditions.
The framework would prohibit hidden surcharges, secret discounts, undisclosed preferential arrangements and informal side agreements that alter published access conditions.
The objective is to ensure that market participants compete under transparent and reasonably predictable conditions.
Cordination of Prices or Market Activities by competing operators
The proposed regulations take a firm position against collusion and coordination among competitors.
According to the overview presented by Dr Tolorunse, competitors would be prohibited from coordinating on pump prices, ex-depot prices, margins and discounts, freight charges, supply or output levels, territories or customer allocation and tender submissions.
Importantly, the proposed rules would cover both explicit agreements and informal understandings capable of restricting competition.
Ordinary commercial contracts could come under competition scrutiny
The proposed regulations would extend competition oversight to a broad range of commercial arrangements where such arrangements could substantially lessen competition.
These include exclusive supply agreements, long-term contracts, take-or-pay provisions, tying and bundling arrangements, loyalty rebates, minimum-volume commitments, resale-price maintenance and franchise restrictions.
The key consideration would be whether such arrangements could foreclose market access or distort competitive conditions.
Prohibition of dominant company
The proposed regulations do not prohibit dominance by itself.
Rather, they seek to prevent abuse of dominance.
This distinction is significant because a company could have a strong position in a market without necessarily violating competition rules. The regulatory concern arises where market power is allegedly used in a manner that harms competition or unfairly exploits other participants.
The proposed framework therefore contains provisions dealing with market dominance, vertically integrated operations, affiliate conduct and intra-group transactions.
Among other requirements, operators may be expected to ensure equal treatment of affiliates and independent competitors, control cross-subsidisation, maintain transparent transfer pricing and, where necessary, establish operational separation.
Treatment of mergers and acquisitions
Another major component of the proposed regulations is competition review of mergers, acquisitions of interests, changes in control and significant joint ventures.
The NMDPRA would, under the proposed framework, examine the possible competitive effects of such transactions, including increases in market concentration, vertical foreclosure, elimination of actual or potential competitors, barriers to entry, effects on consumers and innovation, control of essential facilities and claimed efficiencies.
The provision could make competition considerations an important factor in major corporate transactions across the midstream and downstream petroleum value chain.
Digital markets and artificial intelligence inclusive
The proposed regulations also seek to address emerging competition issues associated with digitalisation.
According to Tolorunse, Part VIII deals with market data, shared platforms, insider information, dominant digital platforms, algorithmic and artificial-intelligence-based pricing, competitively sensitive information and consumer data.
The NMDPRA views digitalisation as capable of improving competition but also creating new opportunities for coordinated pricing, improper information exchange and discriminatory access to markets.
The inclusion of AI-based pricing in the draft framework reflects the growing importance of technology in commercial decision-making and market behaviour.
Enforcement powers of NMDPRA
The proposed regulations are not merely intended to establish principles but also provide an enforcement framework.
The Authority would have powers relating to market monitoring, complaints, preliminary assessments, investigations and information gathering.
The proposed framework also provides for interim measures, cease-and-desist orders, corrective remedies and monitoring trustees.
At the same time, provisions relating to confidentiality, whistleblower protection and opportunities for affected parties to respond before determinations are intended to form part of the enforcement architecture.
NMDPRA and FCCPC to work together
One of the major issues identified during the consultation is the relationship between the NMDPRA and the Federal Competition and Consumer Protection Commission (FCCPC).
The proposed regulations recognise the possibility of concurrent jurisdiction and provide for regulatory cooperation, including joint oversight of competition and consumer-protection issues.
In relation to mergers, the framework envisages cooperation between NMDPRA and FCCPC through information sharing, coordinated or parallel reviews, alignment of timelines and remedies, and compliance with applicable requirements of both regulators.
The proposed arrangement is particularly significant because competition regulation in the petroleum sector must operate alongside the broader national competition framework.
The new framework and regulatory overlap
This is one of the important questions stakeholders are expected to address during the consultation.
While the proposed regulations are intended to strengthen competition oversight within the petroleum sector, the interaction between the NMDPRA’s sector-specific mandate and the FCCPC’s broader competition and consumer-protection responsibilities could require careful clarification.
Tolorunse noted the need to ensure that provisions concerning concurrent jurisdiction, merger approvals, prevailing decisions and enforcement do not inadvertently create jurisdictional conflicts, duplication or uncertainty.
The proposed framework and the petroleum companies
If adopted, the regulations could significantly expand the compliance responsibilities of operators across the midstream and downstream petroleum industry.
Companies would potentially need to assess their pricing policies, commercial contracts, infrastructure-access procedures, affiliate transactions, joint ventures, acquisitions, data-sharing arrangements and corporate governance practices from a competition-law perspective.
For operators controlling essential infrastructure, the proposed framework could also introduce greater scrutiny of how access is granted to competitors and whether infrastructure capacity is being fairly and transparently allocated.
What does it mean for consumers?
For consumers, the intended effect is greater transparency and protection against practices that could restrict competition or manipulate markets.
The framework seeks to create conditions in which market participants compete on more transparent terms, while preventing practices that could artificially restrict supply, manipulate prices or unfairly exclude competitors.
However, the actual impact on consumers would depend on how the final regulations are drafted, implemented and enforced.
The NMDPRA has emphasised that the current exercise is a genuine consultation rather than merely a formal presentation of a completed regulatory instrument.
The Authority said stakeholders’ practical experience would help identify provisions that may require clarification, adjustment or alternative approaches.
The engagement therefore raises several critical questions: Will the regulations provide sufficient certainty for investors? Will they prevent discriminatory access to critical infrastructure? How will they interact with existing competition laws? Will the enforcement framework avoid duplication between regulators? And can the new rules promote competition without creating unnecessary regulatory burdens?
The answers to these and other questions are expected to shape the final version of the proposed regulations.
The NMDPRA said its ultimate objective is to establish a regulatory framework that supports efficient markets, encourages investment and innovation, protects consumers and strengthens the integrity and competitiveness of Nigeria’s midstream and downstream petroleum sector.
Tolorunse urged stakeholders to engage constructively with the process, stressing the importance of ensuring that the final instrument achieves its intended objectives while providing clarity and certainty to operators and investors.
The consultation represents another step in the implementation of the Petroleum Industry Act’s market-oriented framework, with competition protection increasingly being incorporated into the regulation of Nigeria’s petroleum industry.
