NMDPRA moves to curb monopoly, abuse of dominance in oil sector

The Nigerian Midstream and Downstream Petroleum Regulatory Authority is proposing new rules to curb monopoly, abuse of market dominance and other anti-competitive practices in the petroleum industry.

The proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behavioural Regulation will establish a sector-specific competition framework covering 138 regulations across 23 parts of the midstream and downstream petroleum industry.

Speaking at a stakeholder consultation on the proposed regulations in Abuja on Tuesday, the NMDPRA Chief Executive, Rabiu Umar, said the framework was intended to promote fair competition, improve access to critical infrastructure and strengthen transparency in the sector.

He said the regulations would target practices that could restrict competition while ensuring fair and non-discriminatory access to essential facilities.

“The proposed regulations are intended to structure and streamline 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,” Umar said.

He said the consultation was designed to obtain practical input from industry operators and other stakeholders before the regulations are finalised.

“This is therefore a consultation in the truest sense of the word. We are here to listen, to learn and improve the draft where necessary,” he said.

The proposed rules cover activities including pipeline transportation, storage and terminals, wholesale petroleum liquids and gas, retail fuel distribution, petrochemicals and other related commercial activities.

They would apply to licensees, permit and authorisation holders, their affiliates and other persons engaged in commercial activities within the regulated sector, including industry associations where they participate in competition.

Umar said the Authority was particularly interested in stakeholders’ views on the clarity, practicality and likely impact of the proposed framework.

He added that effective regulation should provide certainty for investors, encourage innovation, promote market efficiency and protect the integrity of the petroleum industry.

Providing an overview of the framework, the NMDPRA Authority Secretary and Legal Adviser, Dr Joseph Tolorunse, said the proposed regulations were intended to translate the competition provisions of the Petroleum Industry Act 2021 into detailed rules for the midstream and downstream sector.

He said the framework would address issues including collusion, dominant firms, vertical integration, mergers and acquisitions, changes in control and access to essential infrastructure such as pipelines, terminals and storage facilities.

It would also provide for greater transparency around prices, tariffs, capacity and market information while addressing emerging competition concerns involving digital markets, data and artificial intelligence.

Tolorunse said the regulations were designed to create a level playing field, protect consumers from collusion and market manipulation and encourage investment in the petroleum industry.

He said the framework represented a shift from a regulatory approach focused largely on licensing and technical operations to one that also scrutinises how market power is exercised.

“In practical terms, the regulation transforms competition protection into a core component of petroleum regulation,” he said.

Tolorunse argued that deregulation alone could not guarantee effective competition if a single operator or group controlled critical infrastructure or access to essential market information.

“Competition can still be constrained when one operator controls essential pipelines, terminals, storage capacity, wholesale supply, market information or distribution networks,” he said.

He said the proposed rules would therefore address issues such as who gets access to infrastructure, the terms and cost of access, availability of market information and safeguards against anti-competitive conduct.

The framework would also strengthen NMDPRA’s ability to intervene in matters involving infrastructure access, capacity allocation and abuse of dominance.

However, Tolorunse said regulatory coordination would be important given the overlap between NMDPRA’s mandate under the Petroleum Industry Act and the general competition jurisdiction of the Federal Competition and Consumer Protection Commission.

He disclosed that NMDPRA had signed a Memorandum of Understanding with the FCCPC to improve coordination in regulating competition and consumer protection in the midstream and downstream petroleum sector.

“Our mandates are not necessarily conflicting. Our mandates are complementary and as a result, we have signed an MOU with FCCPC to make sure that we strengthen the regulatory environment as it regards petroleum midstream and downstream sector in the country,” he said.

He said the proposed framework recognised concurrent jurisdiction between both agencies and provided for cooperation on competition and consumer protection matters.

For mergers, he said the regulations envisaged information sharing, coordinated or parallel reviews, aligned timelines and cooperation on remedies and compliance requirements.

Tolorunse, however, said provisions covering concurrent jurisdiction, merger approvals, preliminary decisions and enforcement would require careful consideration to avoid duplication, jurisdictional disputes and regulatory uncertainty.

The stakeholder consultation is expected to inform further review of the draft before the NMDPRA finalises the proposed regulations.