-
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has clarified that it does not have the statutory power to fix petrol pump prices under the Petroleum Industry Act (PIA) 2021.
-
The Authority said government intervention in petroleum pricing is legally restricted to exceptional circumstances where there is formal evidence of a declared market failure, adding that no such market failure has been declared under the current framework.
-
Amid renewed public concerns over rising Premium Motor Spirit (PMS) prices, NMDPRA said it is working with the Nigeria Customs Service and other security agencies to strengthen border surveillance and tackle illegal cross-border diversion and smuggling of petroleum products.
-
The regulator also disclosed that it is collaborating with the Federal Competition and Consumer Protection Commission (FCCPC) to monitor price-gouging, collusion, under-dispensing and compromised product quality, while opening dedicated channels for consumers to report exploitative practices.
September 19, (THEWILL) – The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said it does not fix the pump price of Premium Motor Spirit (PMS), popularly known as petrol, insisting that the Petroleum Industry Act (PIA) 2021 provides for free-market pricing of petroleum products.
The clarification came amid growing concerns over the recent increase in petrol prices and its impact on households, transport operators and businesses across the country.
In a statement issued by its management, the NMDPRA acknowledged the financial strain caused by the recent rise in PMS prices, saying it was aware of the pressure on Nigerians and was committed to supporting measures that could help stabilise the market.
However, the Authority stressed that its powers are governed by the provisions of the PIA and that it could not administratively determine petrol prices under the existing legal framework.
According to the regulator, Section 205(1) of the Petroleum Industry Act provides that wholesale and retail prices of petroleum products shall be based on unrestricted free-market pricing conditions.
“The Authority does not fix pump prices or issue administrative price templates,” it stated.
The NMDPRA further explained that Sections 205(2) to (4) restrict government intervention in petroleum pricing to exceptional circumstances in which there is formal evidence of a declared market failure. It added that no such market failure had been declared.
The Authority said the regulatory framework does not, however, leave petroleum marketers free to engage in anti-competitive practices or exploit consumers.
It cited Section 216 of the PIA, which empowers the regulator to prevent anti-competitive practices, price-fixing and abuse of market dominance within the downstream petroleum sector.
Border Surveillance
As part of efforts to address supply instability and prevent the diversion of petroleum products across Nigeria’s borders, the NMDPRA said it had intensified collaboration with security agencies.
The Authority said it was conducting joint enforcement operations with the Nigeria Customs Service and other relevant security agencies to strengthen surveillance along border corridors and prevent the smuggling of petroleum products.
The measure, it said, was aimed at protecting domestic supply and ensuring that petroleum products intended for the Nigerian market were not illegally diverted to neighbouring countries.
READ ALSO:
NMDPRA, FCCPC Step Up Monitoring
The NMDPRA also disclosed that it was strengthening its consumer-protection measures in collaboration with the Federal Competition and Consumer Protection Commission.
It said both agencies operate under a formal Memorandum of Understanding (MoU) that provides for joint surveillance of the downstream petroleum market.
According to the Authority, the collaboration is focused on identifying and addressing price-gouging, collusion, under-dispensing, and the sale of petroleum products that fail to meet required quality standards.
“Under our formal Memorandum of Understanding (MoU) with the Federal Competition and Consumer Protection Commission (FCCPC), both agencies maintain rigorous joint surveillance to monitor against price-gouging, collusion, under-dispensing, and compromised product quality,” the statement said.
The regulator said deregulation of the downstream petroleum sector did not exempt petroleum operators from complying with regulatory requirements or fair-trade standards.
It warned that marketers and other operators remained subject to regulatory oversight and could face enforcement action where they violate applicable laws or engage in practices that exploit consumers.
Public Reporting Channels
To strengthen consumer participation in market monitoring, the NMDPRA said it was opening dedicated feedback and reporting channels through which members of the public and industry stakeholders could report irregular pricing and exploitative trading practices.
The Authority said complaints received through the channels would be subjected to regulatory investigation and enforcement where violations were established.
It urged consumers and industry participants to report suspected abuses rather than allow exploitative practices to persist unchecked.
The NMDPRA said its broader responsibility under the PIA includes ensuring energy security, promoting fair competition and protecting consumers within the legal framework governing the petroleum industry.
Background
The Petroleum Industry Act, signed into law in 2021, fundamentally changed the regulatory structure of Nigeria’s oil and gas industry and provided the legal framework for deregulation of the downstream petroleum market.
The framework replaced several aspects of the former petroleum-sector regulatory regime and gave greater room for market forces to determine the prices of petroleum products.
The development followed years of government intervention in petrol pricing through subsidy arrangements, under which the state absorbed part of the cost of importing and supplying petrol to keep pump prices below market levels.
The Federal Government under President Bola Tinubu announced the removal of the petrol subsidy on May 29, 2023, leading to a major shift in the pricing of PMS.
Since then, petrol prices have moved in response to factors including crude oil prices, foreign exchange conditions, supply costs, logistics, and competition among market participants.
The government has subsequently placed emphasis on increasing domestic refining capacity, particularly with the emergence of the Dangote Petroleum Refinery and efforts to revive the country’s government-owned refineries.
Against this background, the NMDPRA’s latest statement seeks to draw a clear distinction between market regulation and direct price fixing.
While the regulator said it cannot simply set a uniform pump price for petrol under the PIA’s free-market framework, it stressed that it retains powers to intervene where there is evidence of anti-competitive conduct, market abuse, poor product quality or other breaches of the law.
The Authority said it remained committed to ensuring that the deregulated petroleum market operates within the boundaries of the law and that consumers are protected from illegal or exploitative practices.
It added that its enforcement, surveillance and consumer-protection measures would continue as it works to support supply stability and a fairer downstream petroleum market.
Felix Ifijeh is a journalist with years of professional reporting experience. Known for his keen news sense, compelling storytelling and commitment to accurate, impactful reporting, he has built a reputation for turning leads into clear, engaging, and well-structured reports that resonate with readers. His work reflects deep newsroom experience and a commitment to accurate, impactful journalism.
