KEY POINTS
- NMDPRA proposes rules to ban fuel price-fixing and artificial scarcity.
- Market-sharing, bid rigging and coordinated supply restrictions would also be prohibited.
- Stakeholders have 21 days to submit views before the September 22 consultation forum.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, has proposed sweeping new regulations aimed at strengthening Fuel Competition and preventing petroleum companies from manipulating prices, restricting supply or engaging in other practices capable of distorting competition in Nigeria’s midstream and downstream petroleum sectors.
The proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations, 2026, seek to prohibit a broad range of practices, including fuel price-fixing, artificial scarcity, market allocation, bid rigging, coordinated supply restrictions and the exchange of commercially sensitive information among competing petroleum companies.
The move comes amid renewed concerns about pricing practices in the downstream sector, particularly following allegations by independent petroleum marketers in July that some major fuel importers were selling imported Premium Motor Spirit at coordinated prices significantly above the prevailing prices of products supplied by the Dangote Petroleum Refinery.
The NMDPRA’s proposed rules could significantly reshape how companies compete, price and distribute petroleum products if they are eventually approved.
The regulator announced the proposed regulations in a public notice issued on Thursday, inviting licensees, permit holders and other stakeholders to submit comments within 21 days.
The consultation is being conducted in accordance with Section 216(1) of the Petroleum Industry Act 2021, which requires stakeholder consultation before petroleum-sector regulations are finalised.
The notice, signed by NMDPRA Chief Executive, Rabiu A. Umar, directed stakeholders to review the proposed regulations on the Authority’s website and submit their observations within the stipulated period.
A stakeholder consultation forum has also been scheduled for September 22, 2026, at the NMDPRA headquarters in Abuja.
The consultation will give petroleum marketers, refiners, importers, distributors and other industry participants an opportunity to make recommendations before the proposed rules are finalised.
At the heart of the proposed Fuel Competition framework is a ban on coordinated pricing.
The draft regulations would prohibit petroleum companies from entering formal or informal agreements designed to influence or manipulate prices or other commercial outcomes.
The prohibition covers both direct agreements and less obvious forms of coordination, meaning companies would not necessarily have to sign a written agreement before their conduct could attract regulatory scrutiny.
The draft specifically identifies coordinated pricing of pump prices, ex-depot prices, profit margins, discounts, surcharges, freight and delivery charges as prohibited behaviour.
Pricing formulas and benchmarks could also come under the proposed restrictions if companies coordinate them in ways that prevent, restrict or distort competition.
If adopted, the rules would make it more difficult for competing petroleum companies to collectively determine the prices at which they sell fuel.
Artificial scarcity faces tougher restrictions
The proposed regulations also target artificial scarcity and coordinated restrictions on petroleum supply.
Under the draft framework, competing companies would be prohibited from jointly reducing production, imports, throughput or petroleum-product supplies with the intention or effect of creating shortages or influencing market prices.
The provision could become particularly significant in Nigeria, where disruptions in fuel supply have historically led to long queues, higher prices and difficulties for consumers and businesses.
By targeting coordinated supply restrictions, the NMDPRA is seeking to ensure that scarcity is driven by genuine market conditions rather than deliberate actions by competing businesses.
The proposed rules would also prohibit competitors from dividing the market among themselves.
Companies would not be allowed to allocate customers, geographical territories, product categories or supply areas in ways that prevent them from competing for business.
Such arrangements can reduce consumer choice and allow companies to operate in protected segments of the market without facing normal competitive pressure.
The NMDPRA’s proposed Fuel Competition framework is therefore designed to ensure that petroleum companies compete for customers based on price, supply, quality and service rather than through agreements that divide the market.
The regulator is proposing a ban on bid rigging and collusive tendering within the petroleum industry.
Bid rigging occurs when competitors manipulate procurement processes rather than independently submitting competitive bids.
The practice can increase costs, reduce transparency and undermine the integrity of contracts awarded through competitive processes.
By prohibiting collusive tendering, the NMDPRA intends to strengthen competition and transparency in procurement across the midstream and downstream petroleum sectors.
The proposed regulations go beyond explicit agreements between companies.
The NMDPRA is also targeting tacit collusion, where competitors may avoid making formal agreements but use public statements, industry associations or indirect communication to signal future pricing or commercial strategies to one another.
This could include companies signalling intended price changes or other strategic decisions in ways that allow competitors to coordinate their responses without directly communicating an agreement.
The proposed approach reflects the regulator’s intention to examine not only written contracts but also behaviour that could have the practical effect of undermining Fuel Competition.
