NMDPRA Targets Fuel Price Fixing With New 2026 Rules

By Olumide Johnson

The federal government, through the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), has proposed the Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations, 2026, to prohibit price-fixing, market allocation, supply manipulation, bid-rigging and other conduct that distorts competition across Nigeria’s midstream and downstream petroleum sectors. The draft was opened for a 21-day stakeholder consultation in August 2026, with a consultation forum scheduled for September 22, 2026, in Abuja.

DECISION HIGHLIGHT

The proposal seeks to convert competition principles under the Petroleum Industry Act into detailed behavioural controls, particularly around coordinated fuel pricing, artificial scarcity, dominant market positions and access to critical petroleum infrastructure.

DECISION MEMO

The significance of the proposal lies in its attempt to regulate not only explicit collusion but also the less visible channels through which competitors can coordinate market behaviour.

The draft prohibits agreements or “concerted practice, whether formal or informal, written or oral, explicit or tacit” that prevent, restrict or distort competition. It specifically targets coordinated pump prices, ex-depot prices, margins, discounts, freight charges and pricing formulas.

It also seeks to capture tacit coordination through public statements, trade associations and commercially sensitive information, including future pricing plans, production schedules, customer lists, marketing strategies and bidding intentions. The proposed rules would prevent competitors from jointly reducing production, imports, throughput or supply to create artificial scarcity or influence prices.

The regulatory intervention comes as domestic refining changes the competitive structure of the downstream market and follows July allegations by independent marketers that some major fuel importers were selling imported Premium Motor Spirit at coordinated prices significantly above those of Dangote Petroleum Refinery. The allegations provide market context, rather than established findings of the proposed regulation.

The framework would also regulate the conduct of dominant and vertically integrated operators. A market share of 40 percent or above may create a presumption of dominance, while owners of pipelines, depots, jetties, terminals and storage facilities would be required to provide access on transparent, objective and non-discriminatory terms.

Announcing the consultation, Authority Chief Executive Rabiu Umar stated: “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.”

The notice further stated: “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.”

If adopted, serious violations could attract fines of up to 5 percent of annual turnover from regulated petroleum activities, alongside possible licence suspension or revocation. Continuing violations could attract daily penalties, while directors or managers involved in serious breaches could face personal liability.

DATA BOX

• Consultation period: 21 days.
• Stakeholder forum: September 22, 2026, Abuja.
• Potential dominance threshold: 40 percent market share.
• Serious offences: fines up to 5 percent of regulated petroleum turnover.
• Moderate offences: 1-3 percent of turnover.
• Continuing violations: up to N50m daily in specified circumstances.
• Coverage: pipelines, storage, terminals, wholesale supply, retail distribution, petrochemicals and related Petroleum Industry Act activities.

WHO WINS / WHO LOSES

Consumers and independent marketers could benefit from stronger price competition, reduced artificial scarcity and non-discriminatory infrastructure access.

Operators dependent on coordinated pricing, restrictive supply arrangements, preferential infrastructure access or exclusionary contracts face the greatest compliance and commercial adjustment.

POLICY SIGNALS

The NMDPRA is signalling that petroleum-sector liberalisation will be accompanied by more active market-conduct supervision. The proposed scrutiny of mergers, acquisitions, cross-ownership and joint ventures also indicates greater concern about market concentration.

INVESTOR SIGNAL

Petroleum investors will face greater emphasis on demonstrable commercial independence, transparent pricing, compliant information-sharing and fair infrastructure access. Market power itself may increasingly become a regulatory exposure.

RISK RADAR

The principal risks are regulatory uncertainty during consultation, compliance costs, possible jurisdictional friction between the NMDPRA and the Federal Competition and Consumer Protection Commission, and the enforcement burden involved in proving tacit coordination. The ultimate market effect will depend less on the breadth of the draft than on the consistency and evidentiary quality of its enforcement.