The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Federal Competition and Consumer Protection Commission (FCCPC) have been tasked with ensuring policies that encourage competition, fair and transparent operating conditions within the midstream and downstream petroleum sector.
Energy and extractive industry law experts, who spoke with The Guardian on the recent developments in the petroleum industry, noted that setting of price by a single player is dangerous for the market which could put the consumers at the mercy of such monopolistic operator.
The concerned experts expressed concerns on why the FCCPC failed to appeal the judgment that disallowed them from joining the litigation between Dangote and the NMDPRA in the interest of the consumers.
A petroleum sector expert and legal luminary, Taiwo Ogunleye, said the government should ensure a competitive market where multiple market players can freely enter, compete and operate under fair and transparent conditions. He sought for effective regulatory enforcement that ensures a level playing field where consumers’ interests are protected by avoiding unfair market dominance.
According to him, the government should “avoid price fixing, predatory pricing, discriminatory tariff practices, market allocation, monopolisation or abuse of dominance, exclusive contracts, unfair restriction in distribution and retail operation, refusals to supply or deal, discrimination in pricing, or limiting infrastructure access to competitors”.
He said these behaviours distort market conditions, create artificial barriers for new entrants or small players, undermining transparency in the pricing process, harming consumers’ welfare and hindering innovation and improvement in service quality.
Senior Partner at The Commercial and Energy Law Practice (CANDELP) and Founder 1worq, Israel Aye, said: “If you don’t have a market that promotes fair competition, the consumers will suffer.”
Speaking on the topic: “Fueling fairness: Unlocking the power of competition in Nigeria’s downstream sector”, Aye argued that the slow pace of development in the nation’s power sector was because there was no competition for a very long time. So, it is bad for the economy not to have competition in the power sector,” he stated.
He added that competition will bring low prices for consumers, higher quality products, improved services, products innovation and transparency as well as incentivises modular refineries and new entrants.
According to him, Section 8(1)(d) of the petroleum industry law stipulated that NMDPRA shall ensure fair pricing and competition in the midstream and downstream petroleum operations while Section 120-127 of the FCCPC Act 2018 empowers “FCCPC to monitor and investigate anti-competitive conduct across sectors”.He therefore urged the government to strengthen the institutional autonomy and accountability frameworks.
