JamzNG Latest News, Gist, Entertainment in Nigeria
The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has said petrol pump prices are determined by market forces and are not set by the regulator under the Petroleum Industry Act 2021.
The authority made this known in a statement on Saturday while responding to concerns over the recent increase in retail prices of Premium Motor Spirit, popularly known as petrol, across the country.
The NMDPRA has acknowledged the financial pressure caused by the latest increase in fuel prices, highlighting that the situation is affecting families, transport workers and businesses.
However, the regulator said its role under the PIA was not to impose pump prices on oil traders, but to ensure that operators complied with applicable laws and that consumers were protected from anti-competitive and exploitative practices.
Prices based on market according to PIA
According to the authority, section 205(1) of the Petroleum Industry Act provides that wholesale and retail prices of petroleum products should be based on unrestricted free market price conditions.
He explained that the provision meant that NMDPRA did not set gasoline prices or issue administrative pricing models for petroleum products.
“Under the PIA 2021, section 205(1) provides that wholesale and retail prices of petroleum products shall be based on unrestricted free market pricing conditions,” the authority said.
NMDPRA further explained that sections 205(2) to 205(4) limited government intervention in oil prices to exceptional situations where there was formal evidence of a declared market failure.
It said no market failure had been declared, adding that Section 216 of the PIA gives the authority the power to prevent anti-competitive practices, price fixing and abuse of dominant market position.
The clarification comes amid growing concern among consumers and businesses over the impact of rising petrol prices on transport costs, household expenses and operating costs.
The regulator strengthens surveillance
While stressing that deregulation has not eliminated regulatory obligations, NMDPRA said it is taking steps to safeguard the oil market and maintain supply stability.
The authority said it is conducting joint security operations with the Nigeria Customs Service and other relevant security agencies to strengthen surveillance along the border corridors.
According to NMDPRA, the operations were designed to curb the illegal diversion of petroleum products across Nigeria’s borders and support the stability of the nation’s fuel supply.
The regulator further said that oil operators remain subject to regulatory compliance and fair trade standards, despite the deregulated nature of the downstream oil market.
As part of its memorandum of understanding with the Federal Competition and Consumer Protection Commission, NMDPRA said both agencies maintained joint surveillance of the market.
Surveillance is intended to identify practices such as price manipulation, collusion, under-distribution of petroleum products and sale of products whose quality has been compromised.
NMDPRA said it is also establishing dedicated feedback and reporting channels through which members of the public and industry stakeholders could report suspected irregular pricing and exploitative business practices.
It said complaints received across channels will be subject to regulatory investigations, with enforcement action taken where necessary.
The authority reaffirmed its commitment to carrying out its statutory responsibilities under the Petroleum Industry Act, saying its focus remains on ensuring energy security, promoting fair competition and protecting consumers within the existing legal framework.
