The Federal Government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority, has proposed sweeping competition regulations that would prohibit petroleum companies from fixing fuel prices, restricting product supply, sharing markets or coordinating commercial decisions capable of distorting competition across Nigeria’s midstream and downstream petroleum industry.
The proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations, 2026, seek to curb anti-competitive conduct ranging from pump price coordination and artificial scarcity to bid-rigging, customer allocation, exclusive supply arrangements and the exchange of commercially sensitive information among competitors.
Under the proposed regulations, refiners, marketers and other petroleum industry operators would be required to set prices and service terms independently and refrain from practices that create artificial price uniformity or allocate customers.
The proposed regulation specifically targets resale price maintenance and other price-fixing arrangements, covering contractual and commercial practices that substantially lessen competition in the midstream and downstream petroleum sector.
It also provides that agreements between competitors to fix prices, allocate territories or limit production, as well as vertical agreements resulting in resale price maintenance, market foreclosure or tying, would be deemed invalid, void and unenforceable.
The proposed rules state that “horizontal agreements between competitors to fix prices, allocate territories, or limit production” and “vertical agreements that result in resale price maintenance, market foreclosure, or tying” would fall under the prohibited arrangements.
The move comes amid renewed concerns over pricing practices in the downstream petroleum sector following allegations by independent marketers in July that some major fuel importers were selling imported Premium Motor Spirit at coordinated prices significantly above those of the Dangote Petroleum Refinery.
It also comes amid the growing importance of domestic refining and increasing competition among refiners, importers and petroleum marketers over the supply and pricing of petrol and other products.
However, the provisions are contained in a proposed regulation and are not yet final rules. In a public notice issued on Thursday and posted on its official X handle, the Authority invited licensees, permit holders and other stakeholders to submit comments on the proposed regulations within 21 days, in compliance with Section 216(1) of the Petroleum Industry Act 2021, which requires stakeholder consultation before regulations are finalised.
The notice, signed by the Authority Chief Executive, Rabiu Umar, stated that stakeholders could review the draft regulations on the Authority’s website and submit observations before the consultation period closes. It added that a stakeholders’ consultation forum on the proposed regulations would be held on September 22, 2026, at the Authority’s headquarters in Abuja.
The notice read in part, “In compliance with Section 216(1) of the Petroleum Industry Act 2021 requiring consultation with stakeholders prior to the finalisation of Regulations, the Nigerian Midstream and Downstream Petroleum Regulatory Authority hereby invites licensees, permit holders and other stakeholders to make submissions within twenty-one (21) days from the date of this publication in respect of the proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations.”
It added, “Stakeholders are enjoined to visit the Authority’s website to review the proposed Regulations. All submissions are to be made using the format accessible on the Authority’s website and must be received not later than 21 days from the date of this notice.”
A review of the draft regulations by The PUNCH showed that the Authority intends to outlaw virtually every form of coordinated conduct capable of weakening competition in the petroleum market.
Under Part IV, titled Collusive Agreements and Anti-Competitive Coordination, the draft regulations prohibit petroleum companies from entering into formal or informal agreements designed to influence prices, allocate markets or manipulate commercial outcomes.
The draft states, “No licensee, market participant, or group of undertakings in the midstream or downstream petroleum sector shall enter into any agreement, arrangement, understanding, or concerted practice, whether formal or informal, written or oral, explicit or tacit, that has the object or effect of preventing, restricting, or distorting competition.”
The regulations specifically identify price-fixing or coordinated pricing behaviour as prohibited conduct. According to the draft, “Price-Fixing or Coordinated Pricing Behaviour, agreeing, aligning, or coordinating prices or any pricing element, including pump prices, ex-depot prices, margins, discounts, surcharges, freight/delivery charges, or pricing formulas/benchmarks,” shall be prohibited.
If approved, petroleum companies would no longer be permitted to coordinate pump prices, ex-depot prices, freight charges, discounts, pricing benchmarks or other commercial elements that could influence retail fuel prices.
Beyond pump-price fixing, the proposed regulation seeks to prevent a wide range of practices capable of restricting competition, including market allocation, output restrictions, bid-rigging, tacit collusion, price signalling and the exchange of commercially sensitive information.
The proposed framework also bans market allocation arrangements, where competitors divide customers, geographical territories, product lines or supply areas among themselves instead of competing freely.
Similarly, companies would be prohibited from engaging in bid-rigging or collusive tendering, practices that undermine transparency and competition during procurement processes.
The Authority is also proposing stringent measures against collective supply restrictions capable of creating fuel shortages or manipulating market prices.
The draft regulations prohibit competitors from jointly reducing production volumes, petroleum imports, throughput or product supply with the objective of creating artificial scarcity or influencing prices.
It specifically prohibits competitors from jointly deciding to reduce production, imports, throughput or supply to manipulate prices, create scarcity or alter market conditions. It also targets indirect attempts to influence competitors’ pricing or output decisions through public statements, trade associations or other channels.
The proposed rules state that the fact that such conduct is customary, intended to stabilise the market, prevent price wars or preserve margins would not exempt it from liability.
The proposal also extends to tacit collusion, where competitors avoid direct agreements but signal future pricing intentions or strategic commercial decisions through public statements, trade associations or indirect channels.
The regulations prohibit the exchange of commercially sensitive information, including future pricing plans, production schedules, customer lists, marketing strategies and bidding intentions where such disclosures could reduce competition.
Such provisions are designed to prevent companies from coordinating behaviour without signing formal agreements, a practice competition regulators across several jurisdictions increasingly monitor.
The NMDPRA would also monitor press releases, investor calls, trade association meetings and public statements by dominant or major market players for conduct facilitating prohibited coordination.
The proposed regulation would further prohibit anti-competitive pricing practices such as margin squeeze, predatory pricing, discriminatory or preferential pricing without objective justification, and internal price manipulation between vertically integrated business units that disadvantages unaffiliated competitors.
Under the proposed framework, dominant suppliers would also be barred from imposing unfair or exploitative contractual terms on independent retailers and dealers.
Such practices include non-compete clauses preventing independent retailers from sourcing products from alternative suppliers without commercial justification, forced disclosure of sensitive information such as customer lists and pricing structures, excessive termination penalties and unjustified exclusivity requirements.
The proposed regulation also seeks to ensure that owners and operators of essential petroleum infrastructure, including pipelines, depots, jetties, terminals and storage facilities, provide access to other industry participants on transparent, objective and non-discriminatory terms.
Vertically integrated companies would be prohibited from giving affiliates preferential access or scheduling rights, favouring related parties in capacity allocation or withholding commercially reasonable information from competitors.
The proposed framework focuses more on dominant operators, defining a dominant position as economic strength that enables a company to act to an appreciable extent independently of competitors, customers or consumers. It states that a market share of 40 per cent or above may raise a presumption of dominance, although the authority will consider the wider market structure and the behaviour of competitors.
According to the regulation, companies found guilty of serious anti-competitive conduct could face hefty financial penalties.
The proposed regulations provide for administrative fines of up to five per cent of an offending company’s annual turnover from regulated petroleum activities in Nigeria. Severe infringements, including cartels and abuse of dominance, fall under the category carrying fines of up to five per cent of turnover, while moderate offences could attract between one and three per cent.
The sanctions could go beyond corporate fines, as persistent or serious violations could result in the suspension or revocation of an offender’s licence or permit.
Directors, managers or officers who knowingly and directly participate in serious violations such as cartels could also be referred to the Federal Competition and Consumer Protection Commission for personal liability, disqualified from holding management positions in regulated entities or prosecuted where applicable.
The proposed framework also provides for daily penalties where companies continue to violate regulatory orders. Continuation of prohibited conduct after a final order could attract between N10m and N50m per day, while failure to comply with a final cease-and-desist order could attract between N5m and N25m daily.
The NMDPRA would also have powers to scrutinise mergers, acquisitions, cross-ownership and significant joint ventures in the sector.
Under the proposed rules, mergers, acquisitions, transfers of ownership interests and certain joint ventures involving petroleum licensees would require prior written consent from the authority, with the regulator assessing their potential impact on competition.
The proposed framework also gives the authority powers to investigate suspected anti-competitive practices and impose corrective measures, while recognising the FCCPC as the principal authority on competition law and consumer protection and providing for coordination between both agencies on sector-specific competition matters.
The proposed regulations are intended to apply across the midstream and downstream petroleum sectors, including pipeline transportation, storage and terminals, wholesale supply of petroleum liquids and natural gas, retail fuel distribution, petrochemical production and other related activities licensed under the Petroleum Industry Act.
The latest proposal represents another major regulatory intervention by the NMDPRA since the implementation of the Petroleum Industry Act.
In recent years, the Authority has introduced regulations covering environmental protection, operational safety, decommissioning of petroleum facilities and environmental remediation funding as part of efforts to strengthen governance across Nigeria’s petroleum value chain.
The proposed competition regulations also come as the regulator continues to advocate a more transparent petroleum pricing regime. Recently, the NMDPRA disclosed that it was exploring the establishment of an African petroleum products reference price benchmark to reflect regional market realities and improve price transparency across the continent.
If adopted after stakeholder consultations, the new regulations would provide the Authority with a comprehensive legal framework to investigate and sanction anti-competitive conduct in Nigeria’s midstream and downstream petroleum sectors, reinforcing the competition provisions introduced under the Petroleum Industry Act and promoting a more transparent, efficient and consumer-oriented fuel market.