- Nigeria has proposed 138 competition rules to regulate pricing, market dominance and access to key petroleum infrastructure.
- The draft comes as Dangote Refinery expands to 700,000 barrels per day, reducing Nigeria’s reliance on imported fuel.
- The rules aim to ensure fair competition among refiners, importers and fuel marketers across the petroleum supply chain.
- The framework is still under consultation, with the regulator set to review industry feedback before finalising the rules.
The draft rules would give the Nigerian Midstream and Downstream Petroleum Regulatory Authority a more detailed framework for tackling price fixing, abuse of market dominance and unfair restrictions on access to pipelines, depots, terminals and other essential facilities. They have been presented for consultation and are not yet in force.
The proposal arrives at a consequential moment for Africa’s largest oil producer. Dangote Petroleum Refinery says its crude processing capacity has reached 700,000 barrels a day, up from its original 650,000-barrel design capacity.
Its expansion has reduced Nigeria’s reliance on imported fuel and increased the country’s ability to supply other markets.
That scale also makes the rules governing access, pricing and competition more consequential for refiners, importers and fuel marketers.
At a stakeholder consultation in Abuja on Tuesday, regulator chief Rabiu Umar said the proposed framework was intended to prevent anti-competitive conduct, address abuse of dominance and promote fair access to essential infrastructure.
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“The proposed regulations are intended to strengthen the midstream and downstream petroleum sector by preventing anti-competitive practices, addressing abuse of dominance, promoting fair and non-discriminatory access to essential infrastructure, and also enhancing transparency and market efficiency,” Umar said.
Nigeria’s proposed petroleum competition rules would cover access to facilities including pipelines, terminals and depots.Guardian Nigeria
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Joseph Tolorunse, the regulator’s secretary and legal adviser, said the 138 proposed rules cover pricing, access to infrastructure, market dominance, mergers and enforcement. They also address the use of market data and artificial intelligence in petroleum trading.
“The central purpose of the regulation is to translate the competition provisions of the Petroleum Industry Act 2021 into detailed, enforceable rules for the midstream and downstream petroleum industry,” Tolunrunse said.
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The competition question behind Nigeria’s refining boom
For years, Nigeria exported crude oil while spending heavily on imported petrol and other refined products. Domestic refining is changing that trade.
The next question is whether companies throughout the supply chain can compete fairly when access to storage, transport and wholesale fuel supplies may depend on facilities controlled by larger operators.
The proposed rules would address that question across the midstream and downstream industry. According to the regulator’s account of the consultation, they cover pricing, infrastructure access, dominant market positions, mergers, agreements between companies and the use of market data.
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Their reach extends beyond refineries to fuel distribution and other petroleum businesses.
Nigeria’s Petroleum Industry Act already gives the regulator responsibility for preventing anti-competitive behaviour in midstream and downstream operations and provides for third-party access to certain facilities and pipelines.
The new proposal is intended to set out more detailed rules for applying those powers.
The debate is particularly sensitive because Dangote’s refinery and fuel importers have taken opposing positions in a court dispute over import licences.
Dangote has argued that the licences undermine domestic refining, while the state oil company and marketers have argued that restricting imports could weaken competition and expose fuel supplies to disruption. Those are the parties’ positions in a separate dispute, not findings under the proposed regulations.
Nigeria has also removed petrol subsidies, leaving fuel prices more exposed to changes in crude costs and market conditions. Competition rules cannot by themselves shield consumers from a rise in global oil prices.
Their practical test will be whether smaller suppliers can obtain access to infrastructure on fair terms and whether regulators can identify conduct that unlawfully restricts choice. The authority said it would review stakeholder submissions before finalising the draft.
