KEY POINTS
• NMDPRA says petrol prices are determined by market forces under the Petroleum Industry Act 2021.
• The regulator says it does not set pump prices or issue administrative pricing templates.
• It says surveillance against diversion, price gouging, collusion and other market abuses is being intensified.
MAIN STORY
The Nigerian Midstream and Downstream Petroleum Regulatory Authority has said petrol pump prices are not fixed by the regulator, attributing recent price increases to market forces under the Petroleum Industry Act 2021.
The authority made the clarification in a statement on Saturday following concerns over the latest rise in petrol prices.
It acknowledged the pressure higher fuel costs were placing on households, transport workers and businesses, but said the legal framework governing petroleum pricing did not give it the power to routinely determine retail prices.
According to the NMDPRA, Section 205(1) of the PIA requires wholesale and retail petroleum product prices to operate under unrestricted free market conditions.
It therefore said it neither fixes pump prices nor provides administrative price templates for petroleum products.
The authority added that government intervention in pricing under Sections 205(2) to 205(4) was limited to exceptional circumstances involving formally established market failure.
NMDPRA said no such market failure had been declared.
However, it noted that deregulation does not remove the obligation of petroleum operators to comply with regulatory requirements or fair trade standards.
The authority cited Section 216 of the PIA, which empowers it to act against anti competitive practices, price fixing and abuse of market dominance.
It also disclosed that it was working with the Nigeria Customs Service and other security agencies to strengthen surveillance along border corridors.
The joint operations are aimed at preventing the illegal diversion of petroleum products across borders and supporting supply stability.
NMDPRA further said it was working with the Federal Competition and Consumer Protection Commission under an existing Memorandum of Understanding to monitor practices including price gouging, collusion, under dispensing and compromised product quality.
The authority said dedicated feedback and reporting channels were also being opened for members of the public and industry stakeholders to report suspected irregular pricing and exploitative practices.
Such reports, it said, would be investigated and followed by enforcement where necessary.
THE ISSUES
- The NMDPRA’s position means petrol retailers and suppliers operate within a pricing framework driven by market conditions rather than a fixed pump price issued by the regulator.
- While the pricing system is deregulated, petroleum businesses remain subject to rules against anti competitive conduct, price fixing and abuse of market dominance.
- The recent increase in petrol prices has direct consequences for households, transport workers and businesses because fuel costs feed into transportation and operating expenses.
- Border surveillance is also part of the authority’s response because illegal diversion of petroleum products can affect domestic supply stability.
WHAT’S BEING SAID
“Section 205(2)–(4) restricts government intervention in pricing strictly to exceptional circumstances where there is formal evidence of declared market failure. No such market failure has been declared.” – NMDPRA
“Section 216 empowers the authority to prevent anti-competitive practices, price-fixing, and the abuse of market dominance.” – NMDPRA
“NMDPRA remains steadfast in fulfilling its statutory mandate to ensure energy security, foster fair competition and protect consumers within the PIA’s legal framework.” – NMDPRA
WHAT’S NEXT
NMDPRA said it would continue border surveillance with security agencies and joint monitoring with the FCCPC.
The authority also said reports of irregular pricing and exploitative trade practices received through its dedicated channels would be investigated and enforced where necessary.
BOTTOM LINE
NMDPRA says recent petrol price increases are occurring within a market based pricing system established by the PIA, rather than through prices fixed by the regulator. It says deregulation does not prevent regulatory action against practices that harm competition or consumers.
