Tag Archive for: #AntitrustLaw

BY ADERONKE ALEX-ADEDIPE & OLUWAYEMI IBIRINDE

Introduction 

On 6th August 2026, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (“NMDPRA”) launched a stakeholder consultation in relation to the proposed Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behavior Regulations, 2026 (the “Regulations”). Comprising 138 provisions across 23 parts, the Regulations seek to introduce the first dedicated, detailed competition-law framework governing anti-competitive conduct in Nigeria’s midstream and downstream petroleum sector. 

Historically, competition concerns in the sector including price-fixing, market allocation and abuse of dominant positions by vertically integrated operators were addressed only indirectly, through the general provisions of the Petroleum Industry Act and the oversight of the Federal Competition and Consumer Protection Commission (FCCPC”). The Regulations seek to close this gap by translating the PIA’s competition provisions into sector-specific rules, while establishing a coordination framework with the FCCPC through a recently signed Memorandum of Understanding. 

In this newsletter, we examine the key provisions of the Regulations and highlight some of the legal and commercial considerations for operators. 

Who Do the Regulations Apply To? 

The Regulations apply broadly to licensees and permit holders operating across the midstream and downstream petroleum value chain. Specifically, they apply to: 

1. operators engaged in pricing, marketing and distribution of petroleum products (marketers and retailers); 
2. owners and controllers of essential petroleum infrastructure, including pipelines, storage terminals, jetties, bulk-loading facilities and depots;
3. vertically integrated operators and their affiliates, including entities engaged in intra-group transactions; and 
4. operators participating in mergers, acquisitions, or joint ventures within the sector. 

The regulatory focus is therefore not on any single category of licensee, but on any conduct, agreement or arrangement capable of preventing, restricting or distorting competition in the sector. 

What are the Key Prohibitions? 

1. Prohibition on Anti-Competitive Conduct (Regulation 3) 

The foundation of the regime is Regulation 3, which prohibits any conduct, agreement, arrangement, understanding, decision or practice that has the object or effect of preventing, restricting or distorting competition regardless of whether it is formalised in writing or conducted informally. 

2. Price-Fixing, Market Allocation and Bid-Rigging 

Competing operators are prohibited from coordinating pump prices, ex-depot prices, margins, discounts, freight charges, supply or output levels, territories, customer allocation and tender submissions. 

3. Restrictive Commercial Arrangements 

Exclusive supply agreements, long-term contracts, take-or-pay arrangements, tying and bundling, loyalty rebates, minimum-volume commitments, resale price maintenance and franchise restrictions may be scrutinised where they substantially lessen competition with focus is not on whether they foreclose market access or distort competitive conditions. 

4. Abuse of Dominance 

The Regulations do not prohibit market dominance itself, only its abuse. Dedicated provisions address vertically integrated firms, affiliate transactions and cross-subsidisation. 

5. Infrastructure Access and Transparency 

Controllers of essential infrastructure are prohibited from unjustifiably refusing, delaying or obstructing access by qualified third parties. Access must be transparent, non-discriminatory, and based only on legitimate technical, safety and creditworthiness considerations. Operators must also publish tariffs, fees and service conditions; hidden surcharges, secret discounts and undisclosed preferential arrangements are prohibited. 

6. Mergers and Digital Markets 

The Regulations introduce a merger and acquisition review mechanism empowering the NMDPRA to assess transactions for effects on competition, market entry and consumer welfare, alongside emerging oversight of digital markets including shared platforms, data-sharing and algorithmic pricing risks. 

Compliance Considerations 

Pending finalisation of the Regulations, operators in the midstream and downstream sector should consider the following: 

1. Operators should audit supply agreements, distribution contracts and pricing arrangements with competitors for provisions that could be characterised as price-fixing, market allocation, or bid-rigging. 
2. Vertically integrated operators and infrastructure owners should evaluate whether their current market position could expose them to “abuse of dominance” scrutiny, particularly regarding third-party infrastructure access. 
3. Owners of pipelines, depots, terminals and jetties should ensure access terms are documented, published, and based on objective technical and safety criteria. 
4. Organisations should establish internal governance procedures including competition-law training and pricing-communication protocols to monitor ongoing compliance ahead of finalisation. 
5. Given that NMDPRA has invited stakeholder input on the clarity, practicality and impact of specific provisions, operators should consider making submissions to flag ambiguous provisions before the Regulations are finalised. 

Penalties for non-compliance 

The draft Regulations introduce significant sanctions for non-compliance. Operators found guilty of serious offences, including price-fixing, bid-rigging, market allocation and abuse of market dominance, may be fined between 3–5% of annual turnover. Persistent offenders may face licence suspension or revocation while the NMDPRA may impose daily penalties on operators that fail to comply or continue prohibited conduct. 

Conclusion 

The NMDPRA indicates it is actively reviewing submissions ahead of finalization. Therefore, stakeholders should prioritise reviewing their commercial arrangements, infrastructure access policies, and internal compliance frameworks.  

Operators who engage proactively with the consultation process, and who position themselves for compliance ahead of finalisation, will be better placed to navigate this significant shift in Nigeria’s petroleum regulatory landscape.