The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) is moving to tighten its grip on market power in the petroleum industry, with proposed regulations targeting monopoly, abuse of dominance, anti-competitive practices and discriminatory access to critical infrastructure.
The proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behavioural Regulation is designed to 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 on Tuesday in Abuja, the Authority Chief Executive NMDPRA, Rabiu Umar, said the framework was intended to streamline the sector by preventing anti-competitive practices, addressing abuse of dominance, promoting fair and non-discriminatory access to essential infrastructure, and enhancing transparency and market efficiency.
He said: “The proposed regulations are intended to structure and streamline midstream and downstream petroleum sector by preventing anti-competitive practices, address abuse of dominance, promoting fair and non-discriminatory access to essential infrastructure, and also enhance transparency and market efficiency.”
According to him, the consultation was aimed at obtaining practical input from 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.”
The NMDPRA boss explained that the proposed regulations cover areas including transportation through pipelines, storage and terminals, wholesale petroleum liquids and gas, retail fuel distribution, petrochemicals and related commercial activities.
He said the Authority particularly welcomed stakeholders’ views on “the clarity, practicality, and likely impact of the proposed regulations.
“We encourage participants to identify specific provisions that may require clarification or refinement and, where appropriate, suggest practical alternatives that can achieve the intended regulatory objectives.”
The regulations would apply to licensees, permit and authorisation holders, affiliates and other persons engaged in commercial activities within the sector, including industry associations where they are competing.
The NMDPRA urged stakeholders to identify provisions requiring clarification or refinement and to offer practical alternatives capable of achieving the intended regulatory objectives.
The ACE said effective regulation must provide certainty, support investment and innovation, promote an efficient market and protect the integrity of the petroleum sector.
“The Authority recognizes that effective regulation must provide regulatory certainty, support investment and innovation, promote efficient market and protect integrity of the petroleum sector.”
Giving an overview of the proposed framework, the Authority Secretary and Legal Adviser, Dr Joseph Tolorunse, said the regulations were designed to translate the competition provisions of the Petroleum Industry Act (PIA) 2021 into detailed and enforceable rules for the midstream and downstream petroleum sector.
Tolorunse noted that the framework would address anti-competitive conduct, open access to pipelines, networks, terminals and other essential facilities, price and tariff transparency, collusion and coordination among competitors, dominant firms, vertical integration, mergers and acquisitions, changes in control and emerging issues around digital markets, data and artificial intelligence.
According to him, the objective was to create a level playing field, prevent monopoly and abuse of dominance, protect consumers from collusion and market manipulation, and increase transparency around prices, capacity and market information.
He said the regulations would also seek to attract investment and align Nigeria’s petroleum competition regime with international best practices.
Tolorunse said the framework represented a shift from a regulatory system focused largely on licensing and technical operations to one that would actively regulate how market power is exercised within the petroleum industry.
“In practical terms, the regulation transforms competition protection into a core component of petroleum regulation.
“Rather than leaving competition matters solely to general competition law, the regulations address sector-specific issues.”
According to him, deregulation or liberalisation alone could not guarantee genuine competition where a single operator or group controlled essential pipelines, terminals, storage capacity, wholesale supply, market information or distribution networks.
“Liberalization or market deregulation cannot produce a genuinely competitive petroleum market merely by licensing participants.
“Competition can still be constrained when one operator control essential pipelines, terminals, storage capacity, wholesale supply, market information or distribution network.
“The regulation, therefore, attempts to address the economic architecture of the market: who gets access, on what terms, at what price, with what information, and subject to what competitive safeguards.”
He said the regulations would also strengthen NMDPRA’s ability to intervene in issues relating to market infrastructure, regulatory access, capacity allocation and abuse of dominance.
However, Tolorunse stressed the need to ensure regulatory certainty, particularly because of the interface between the NMDPRA’s mandate under the PIA and the general competition jurisdiction of the Federal Competition and Consumer Protection Commission (FCCPC).
He disclosed that the NMDPRA had recently signed a Memorandum of Understanding with the FCCPC to strengthen regulatory coordination in the petroleum midstream and downstream 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.”
Tolorunse said the proposed regulations expressly recognised concurrent jurisdiction and regulatory coordination between NMDPRA and FCCPC, including joint oversight of competition and consumer protection.
“For merger transactions, the framework contemplates cooperation between NMDPRA and FCCPC, including information sharing, coordinated or parallel reviews, alignment of timelines, remedies and compliance with applicable requirements of both regulations.”
He, however, noted that provisions dealing with concurrent jurisdiction, merger approvals, preliminary decisions and enforcement would require careful consideration to prevent duplication, jurisdictional conflicts or uncertainty.
The stakeholder consultation is expected to feed into the review and possible refinement of the proposed regulations before their finalisation