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For years, competition in Nigeria’s petroleum downstream sector was largely discussed in terms of the number of filling stations, marketers and importers operating in the market. But as the industry moves from an import-dependent model to one increasingly shaped by large-scale domestic refining, the meaning of competition is changing.
The emergence of the Dangote Petroleum Refinery, alongside existing and planned modular and conventional refineries, has altered the structure of Nigeria’s petroleum market and raised a new question of how the transition to domestic refining does not replace one form of market dependence with another.
That question is now at the centre of the Federal Government’s latest regulatory intervention.
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has proposed the Midstream and Downstream Petroleum Prevention of Anticompetitive Practices and Behaviours Regulations, 2026, a framework through which the Authority seeks to prevent conduct capable of restricting or distorting competition in the midstream and downstream petroleum industry.
The proposed rules identify a range of practices that NMDPRA considers anti-competitive, including price fixing, market allocation, bid-rigging, collusive tendering, restrictions on supply and certain forms of exchange of commercially sensitive information among competitors.
While the immediate focus of the draft is on preventing anti-competitive conduct among operators, the proposed regulations come at a defining moment for Nigeria’s downstream petroleum market, where the emergence of large-scale domestic refining is changing the traditional relationship between refiners, importers, marketers and consumers.
For the Executive Secretary of the Major Oil Marketers Association of Nigeria (MEMAN), Mr. Clement Isong, competition remains critical to ensuring that consumers benefit from the transformation taking place in the downstream sector.
Importation, he has argued, can contribute to competition because it provides an alternative source of supply and prevents the market from becoming dependent on a single supplier.
The implication is that domestic refining and local production should not automatically translate into a closed market.
Nigeria may have achieved an important milestone by developing substantial domestic refining capacity, but the benefits of that investment ultimately depend on whether consumers continue to have access to competing sources of supply.
This is particularly important in a market where the size of a single refinery gives its operator significant influence over supply.
A refinery capable of producing hundreds of thousands of barrels of refined products daily can transform a country’s energy security, reduce foreign exchange pressure and cut dependence on imports. But the same scale also means that the structure and behaviour of the market will remain important as domestic refining expands.
That concern is also reflected in the position of the President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry
Gillis-Harry has advocated a market in which qualified marketers are allowed to source petroleum products from different suppliers, arguing that competition among suppliers can help moderate prices and prevent excessive dependence on a single source.
For him, the issue is not whether Nigeria should support domestic refining. It should. The question is whether domestic refining should coexist with a competitive market.
A refinery can be domestically owned and strategically important while the market around it remains competitive. The views of both industry leaders point to the importance of maintaining a market in which suppliers and marketers have room to compete on price, quality, reliability and efficiency.
Similarly, Executive Vice Chairman and Chief Executive Officer of Federal Competition and Consumer Protection Commission (FCCPC), Mr.Tunji Bello, had in a statement in June 2026, expressed concern over findings from an ongoing surveillance of the downstream petroleum market suggesting undue exploitation of consumers.
FCCPC stated that a review of the gantry prices of local refiners, marketers, depot operators and retail outlet operators revealed token reductions in prices that are not commensurate with the steep fall in crude prices in the global market.
“To be clear, the Commission does not regulate or approve petroleum prices in a deregulated downstream market. Our responsibility under the Federal Competition and Consumer Protection Act, 2018, is to promote competitive markets, prevent anti-competitive conduct, and protect consumers from unfair, deceptive and exploitative business practices.
“We are concerned that while dealers often respond swiftly by hiking pump prices whenever crude prices rise, it is curious that it is taking forever for consumers to benefit significantly when crude prices fall. Competitive markets must work fairly in both directions.”
It is against this backdrop that NMDPRA has proposed its new competition rules.
Under the draft regulations, the Authority seeks to prohibit agreements, arrangements or understandings between market participants where their purpose or effect is to prevent, restrict or distort competition in the midstream and downstream petroleum industry.
The draft does not limit such arrangements to formal written agreements. It covers agreements or understandings that may be formal or informal, written or oral, and includes conduct that has the effect of restricting competition.
On pricing, the proposed regulations specifically target arrangements between competitors to fix or coordinate prices and other commercial terms.
The draft identifies matters including pump prices, ex-depot prices, margins, discounts, surcharges, freight and delivery charges, as well as pricing formulas and benchmarks, among the areas in which coordinated conduct could amount to an anti-competitive practice.
The proposed provision is significant in a downstream market where changes in wholesale prices can quickly be reflected in pump prices paid by consumers.
NMDPRA also seeks, through the draft, to prohibit arrangements between competitors to restrict production, imports, throughput or supply of petroleum products where such conduct is aimed at creating artificial scarcity or manipulating market conditions.
The proposed regulations further identify market allocation as prohibited conduct.
According to the draft, competitors would not be permitted to enter into arrangements designed to divide customers, geographical territories, product markets or supply areas among themselves rather than compete for those customers or markets.
Targeting bid-rigging and collusion
The proposed rules seek to prevent competitors from coordinating bids or otherwise manipulating competitive procurement processes in a way that undermines genuine competition.
Another area addressed by NMDPRA is the exchange of commercially sensitive information between competitors.
The draft identifies information relating to matters such as future pricing plans, production schedules, customer information, marketing strategies and bidding intentions as potentially problematic where its exchange could facilitate anti-competitive conduct.
The proposed regulations also seek to address forms of coordination that may not necessarily involve a conventional written agreement between competitors.
By covering agreements, arrangements and understandings, the draft seeks to establish a broader basis for dealing with conduct that has the purpose or effect of restricting or distorting competition.
For NMDPRA, the proposed framework is therefore intended to establish clearer rules for how operators conduct themselves in a market that is becoming increasingly competitive and structurally different from the one that existed when Nigeria depended predominantly on imported petroleum products.
The draft also places emphasis on the protection of consumers and the promotion of fair competition within the midstream and downstream petroleum industry.
This is particularly relevant as the industry attracts investment into refining, storage, logistics, distribution and other segments of the petroleum value chain.
The proposed regulations seek to ensure that commercial arrangements and business practices do not have the effect of undermining competitive conditions or restricting other participants from competing in the market.
The implications of the proposed framework extend beyond the relationship between refiners and marketers.
The downstream petroleum sector is closely connected to virtually every part of the Nigerian economy. Fuel prices influence transportation, logistics, manufacturing, agriculture, electricity generation and household expenditure.
Consequently, the manner in which competition operates in the petroleum market has implications far beyond the filling station.
This explains why Isong’s emphasis on alternative sources of supply and Gillis-Harry’s call for access to multiple suppliers are important to the emerging debate.
Their positions point to a common concern: Nigeria should not exchange dependence on imported petroleum products for dependence on a single domestic supplier.
Domestic refining should reduce import dependence, but competition should remain an important feature of the market as refiners and marketers compete for consumers.
That means the success of the Dangote refinery and other domestic refineries should not be measured only by how much Nigeria imports.
It should also be considered in terms of how efficiently the domestic market functions, how many credible suppliers can participate, how transparent prices are and whether consumers have meaningful alternatives.
The 2026 draft regulations appear designed to provide NMDPRA with a formal framework for addressing some of these concerns.
Rather than focusing only on licensing and operational requirements, the proposed rules specifically address the conduct of market participants and identify practices which the Authority considers capable of preventing, restricting or distorting competition.
For years, Nigeria’s petroleum regulation was dominated by questions of supply, subsidy, importation, pricing and infrastructure.
The proposed framework introduces a stronger focus on how participants behave within the market and whether their commercial arrangements are consistent with competitive conditions.
More posers
Who controls supply? Can suppliers coordinate prices? Can competitors divide territories or customers? Can companies restrict supply to create artificial scarcity? Can competitors exchange commercially sensitive information in ways that undermine competition?
These are among the issues addressed by the proposed regulations.
The consultation process will now provide operators and other stakeholders with an opportunity to examine the proposed framework before it is finalised.
NMDPRA has invited licensees, permit holders and other stakeholders to submit comments on the proposed regulations within the stipulated period, while a stakeholders’ consultation forum is scheduled to take place in Abuja on September 22, 2026.
For the Authority, the consultation is part of the process of developing a regulatory framework for preventing anti-competitive practices and behaviours in the midstream and downstream petroleum industry.
But the effectiveness of the eventual regulations will ultimately depend on how they are implemented.
For industry operators, the critical issue will be how clearly the final rules define prohibited conduct and how consistently they are applied across the market.
For consumers, the broader expectation is that a more competitive petroleum market will translate into greater choice, more efficient supply and better pricing.
Nigeria has spent years trying to build a petroleum industry capable of attracting investment, supporting domestic refining and reducing dependence on imports.
The next phase is to ensure that the market created by those investments remains competitive.
The proposed NMDPRA regulations could, therefore, mark an important stage in the evolution of Nigeria’s petroleum market, not simply because they seek to prohibit specific anti-competitive practices, but because they come at a time when the country’s downstream industry is undergoing one of its most significant structural changes in decades.
As domestic refining expands, the central question will no longer be only how much fuel Nigeria can produce.
It will also be whether the market remains open enough for suppliers to compete, marketers to make commercial choices and consumers to benefit from the competition that the country’s new refining capacity is expected to create.
