NMDPRA Toughens Crackdown On Market Abuse, Threatens Licence Revocation For Under-dispensing

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has toughened its stance against market abuse in the petroleum sector, unveiling a draft competition code for the industry, even as it threatened to revoke the licences of fuel stations caught under-dispensing products to consumers.

NMDPRA issued a stern warning through an industry circular from its Abuja headquarters, stating that it will revoke the operating licences of fuel stations found to be under-dispensing petroleum products, describing the practice as a serious breach of consumer trust that will not be tolerated.

“Outlets found to be under-dispensing, operating with improperly calibrated equipment, or otherwise compromising dispensing accuracy will be required to take immediate corrective action,” the circular stated. “Persistent or serious violations will be subject to appropriate sanctions, up to and including revocation of the outlet’s licence, in line with NMDPRA’s regulations.”

The Authority directed all retail outlet operators to immediately calibrate and verify their dispensers and totalisers to ensure that consumers receive the full value of products purchased, and said it had intensified nationwide inspections and enforcement activities to check for under-dispensing and other practices that compromise dispensing accuracy.

NMDPRA called on the Major Energy Marketers Association of Nigeria (MEMAN), the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), the Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) to promptly notify their members of the directive and support full compliance across the industry.

Meanwhile, at a Stakeholders’ Consultation Forum in Abuja, the Authority presented the draft Midstream and Downstream Petroleum Prevention of Anti-Competitive Practices and Behaviour Regulations, 2026 — a 138-regulation, 23-part framework that would give Nigeria’s petroleum sector its own dedicated competition code for the first time, translating the competition provisions of Section 216 of the Petroleum Industry Act (PIA) 2021 into enforceable, sector-specific rules.

Declaring the forum open on behalf of the Authority’s chief executive, Rabiu Abdullahi Umar, said the Authority had already received several submissions from operators and wanted their practical experience to shape the final text.

“This is therefore a consultation in the true sense of the word. We are here to listen, learn and improve the draft where necessary,” Umar said, urging participants to flag provisions needing clarification and propose practical alternatives.

Giving an overview of the draft, Dr Joseph Tolorunse said the regulations go beyond price-fixing to address infrastructure access, dominance, vertical integration, mergers, and digital markets.

At its core is a broad prohibition — Regulation 3 — against any conduct, agreement or practice that prevents, restricts or distorts competition. Owners of pipelines, terminals, jetties and depots would be barred from unjustifiably denying access to qualified third parties, with tariffs required to be published and access kept transparent and non-discriminatory.

Competitors would be prohibited from coordinating on pump prices, margins, freight charges, supply volumes or tender submissions, while restrictive commercial arrangements such as exclusive supply deals and resale price maintenance would face scrutiny. Vertically integrated operators would be required to treat affiliates and competitors equally and maintain transparent transfer pricing.

A dedicated review mechanism would also cover mergers, acquisitions and significant joint ventures, and the draft breaks new ground by addressing algorithmic and AI-based pricing. The Authority would gain powers of market monitoring, investigation and cease-and-desist orders, while formalising concurrent jurisdiction with the Federal Competition and Consumer Protection Commission (FCCPC) on merger reviews.

Tolorunse cautioned that the overlap with FCCPC needs careful handling. “We must ensure that the final regulation does not inadvertently create jurisdictional conflict, duplication or uncertainty,” he said.

The draft competition code and the under-dispensing directive point to a broader shift in posture at NMDPRA — from an Authority historically focused on licensing and technical regulation toward one actively policing how operators treat both competitors and consumers across the value chain. Where the draft regulations target structural abuses such as collusion, infrastructure hoarding and anti-competitive mergers, the circular addresses abuse at the point of sale, with both carrying the same ultimate sanction: licence revocation for non-compliance.

The Authority reaffirmed its commitment to protecting consumers, promoting transparency and upholding the integrity of petroleum product transactions nationwide.