NMDPRA: Petrol Prices Driven By Market Forces, Not Regulatory Fixing

The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has clarified that it does not fix the pump price of petrol, saying prices are determined by market forces under the Petroleum Industry Act (PIA) 2021.

The clarification came amid renewed concerns over the recent increase in the price of Premium Motor Spirit (PMS), commonly known as petrol, and its impact on households, transport operators and businesses across the country.

In a statement on Saturday, the Authority cited Section 205(1) of the PIA, which provides that wholesale and retail prices of petroleum products shall be based on unrestricted free-market pricing conditions.

According to NMDPRA, it neither fixes petrol pump prices nor issues administrative price templates to determine what marketers should charge.

The regulator further explained that Sections 205(2) to (4) of the PIA restrict government intervention in petroleum pricing to exceptional circumstances where there is formal evidence of a declared market failure. It said no such market failure had been declared.

However, NMDPRA stressed that deregulation does not remove its responsibility to protect consumers and ensure fair competition.

It said Section 216 of the PIA empowers the Authority to prevent anti-competitive practices, price-fixing and abuse of market dominance.

The Authority also disclosed that it is working with the Nigeria Customs Service and other security agencies to strengthen surveillance along border corridors and curb the illegal diversion and smuggling of petroleum products.

NMDPRA added that, through a Memorandum of Understanding with the Federal Competition and Consumer Protection Commission (FCCPC), both agencies monitor practices including price-gouging, collusion, under-dispensing and compromised product quality.

The regulator said it would also establish dedicated feedback and reporting channels through which members of the public and industry stakeholders can report irregular pricing and exploitative practices for investigation and enforcement.

NMDPRA said it remained committed to ensuring energy security, promoting fair competition and protecting consumers within the framework of the Petroleum Industry Act.