Competition Law and Energy Regulation in Nigeria: A Template for Market Negotiation; an Assessment of Anticompetitive Practices.

 By: Moyinoluwa Temilade Oluyemi

Abstract

Nigeria’s energy sector has historically been characterized by significant state control particularly evident in the oil and gas and electricity industries. The 1999 Constitution of the Federal Republic of Nigeria, as amended, unequivocally vests the ownership and control of all mineral resources, including oil and gas, exclusively in the federal government. This constitutional provision laid the groundwork for a centralized, state-dominated energy landscape for decades. Nigeria faces a persistent paradox, vast energy resource endowment coexists with chronic under-supply, inefficiency, and unreliable access to electricity and other modern energy services^[1] This “energy poverty” acts as a critical brake on economic growth, social development, and poverty alleviation.^[2] Recognizing this, successive Nigerian governments have embarked on reforms aimed at transforming the energy sector, most notably in electricity, through liberalisation, privatisation, and the introduction of market mechanisms.^[3]  This raises fundamental questions, how do competition law principles interact with, complement, or potentially conflict with sector-specific energy regulation in the Nigerian context? How effectively can the FCCPC identify and address anti-competitive practices within a sector undergoing profound transition and still heavily influenced by regulatory interventions? Can the interplay between these regimes provide a robust “template for market negotiation” a framework facilitating efficient, fair, and competitive commercial interactions between market participants? The core problem this article seeks to address is the lack of a clear, effective, and harmonized framework governing the interaction between competition law, which is usually between FCCPA and FCCPC  and sector-specific energy regulation leading to potential regulatory gaps, overlaps, and uncertainties that hinder the detection, assessment, and remediation of anti-competitive practices, thereby impeding the development of truly competitive energy markets.

INTRODUCTION

Prior to the Federal Competition and Consumer Protection Act (FCCPA), Nigeria lacked a dedicated, economy-wide competition law. Regulation was piecemeal and sector-specific which includes the pre-1999 era regulation which was largely absent or incidental; during these times, there was focus on price controls and specific sectors like banking, with no overarching competition philosophy.^[4] The Nigerian Communications Act (NCA) 2003 also established the Nigerian Communications Commission (NCC) and empowered it, under Section 90, to promote fair competition and prevent anti-competitive practices in the telecommunications sector, representing a significant step towards sectorial competition regulation.^[5] The Electric Power Sector Reform Act (EPSRA) 2005 now repealed and replaced by the Electricity Act 2023 created the Nigerian Electricity Regulatory Commission (NERC) and granted it powers, under Section 74 to regulate competition and prevent abuse of market power within the electricity market^[6](these powers are now reinforced by Section 34 of the Electricity Act 2023).

The Foundational Legislation: Federal Competition and Consumer Protection Act (FCCPA), 2018

The Federal Competition and Consumer Protection Act (FCCPA) was enacted in December 2018 and subsequently signed into law by the late Nigerian President Muhammadu Buhari in January 2019. This legislative milestone introduced a long-anticipated codified set of competition rules into Nigeria’s regulatory oversight framework. The primary aim of this comprehensive legislation was to minimize market distortions across all sectors and ensure that rules of fair play are respected in the marketplace.

The FCCPA established Nigeria’s first comprehensive competition and consumer protection regime. It repealed the Consumer Protection Council Act and superseded the limited competition provisions in other statutes concerning conduct within its scope.^[7] Its key objectives are outlined in Section 1 and permeate the Act:

• Promote and maintain competitive markets.
• Protect consumer welfare and interests.
• Prohibit restrictive or unfair business practices.
• Ensure freedom of trade for all participants.
• Provide a legal framework for the regulation of competition and consumer protection.

Substantive Provisions Prohibiting Anti-Competitive Conduct

The FCCPA defines and prohibits core categories of anti-competitive behavior, for example one of which is the prohibition of anti-competitive agreements, this is solidified by section 59 of the FCCPA, Prohibits agreements between undertakings, decisions by associations of undertakings, or concerted practices which have as their object or effect the prevention, restriction, or distortion of competition within any market in Nigeria,^[8] This includes Price-fixing, market sharing, output limitation, and bid-rigging are considered illegal according to Section 59 of the FCCPA Act 2018. Also, Sections 59(2), 60 and 61 prohibits Vertical and horizontal agreements, which usually includes exclusive dealing, tying, resale price maintenance. They are usually assessed under a rule of reason standard, especially when considering factors such as market power and its effect on competition. ^[9]

Furthermore, the FCCPA in section 72, further prohibits conduct by one or more undertakings holding a position of dominance which amounts to an abuse of that position and has as its object or has effect on the prevention, restriction, or distortion of competition. With major examples being Predatory pricing, Limiting production, markets, or technical development,  Applying dissimilar conditions to equivalent transactions which could equate to discrimination, Tying or bundling unrelated products, refusing access to essential facilities which are usually subject to specific conditions.^[10] Sections 92 to 103 establish a mandatory pre-merger notification regime. Parties to a merger are broadly stipulated by the FCCPA with the following aims such as acquisitions, amalgamations, and joint ventures are required to notify the FCCPC if their combined turnover or assets in Nigeria meet or exceed the prescribed thresholds.^[11] The FCCPC assesses whether the merger is likely to substantially prevent or lessen competition (SLC) in any market in Nigeria. It can approve, approve with conditions, or prohibit the merger.^[12]

While competition-focused, the FCCPA integrates strong consumer protection measures in Part XV of the FCCPA Act, including prohibitions on unfair business practices, unconscionable conduct, false representations, product safety standards, consumer rights which includes information, choice, redress and redress mechanisms.^[13] This dual mandate reflects the intertwined nature of competition and consumer welfare.

The FCCPA arms the FCCPC with extensive powers to enforce its provisions; a perfect example is seen in Sections 27 to 38, where the FCCPA grants power to the FCCPC to initiate investigations through the Competition and Consumer Protection Tribunal(the Tribunal) suo moto or upon complaint, summon persons, demand documents and information, enter premises with a warrant and conduct searches with a warrant.^[14]

Also sections 69 imposes significant financial penalties for contraventions, calculated based on turnover or as a fixed sum^[15], it is worthy of note that Penalties for cartel participation are particularly severe.

The Competition and Consumer Protection Tribunal (CCPT)

In Part VII of the FCCPA 2018, the Competition and Consumer Protection Tribunal (CCPT) is designated as a specialised judicial body responsible for the adjudication of the provisions of the FCCPA 2018. Section 47 of the act describes the jurisdiction of the tribunal to hear appeals against the FCCPC and such matters to border on merger clearances, penalties, etc. it is also responsible for reviewing FCCPC’s decision upon application. It also is responsible for adjudicating matters that are in the form of private actions, and it has the jurisdiction to hear matters that arise under the act and other related regulations.^[16]

The Competition and Consumer Protection Tribunal (CCPT) also has powers which bears resemblance to that of a high court; these powers include the granting of injunctions, awarding damages, and reviewing administrative decisions.^[17] The tribunal is composed of a chairman who is the president and is equivalent to the judge of the high court and other members with expertise in law, economics, accounting, or business.

Federal Competition and Consumer Protection Commission (FCCPC)

The FCCPC is established under Section 3 of the FCCPA as the apex body responsible for implementing the Act. The FCCPC’s function according to section 17 includes:^[18]

• Promoting and maintaining fair competition.
• Protecting consumers from unfair practices.
• Investigating, ruling upon, and penalising anti-competitive conduct.
• Reviewing and regulating mergers and acquisitions.
• Conducting market studies and inquiries.
• Educating stakeholders and promoting a competition culture.
• Cooperating with sector regulators and international counterparts.

Since its inception, the FCCPC has been in active service to actualise its mandate through merger reviews by establishing procedures and reviewing various mergers across various sectors. ^[19] It has also been involved in anti-cartel enforcement by launching investigations into sectors like cement, airlines, and food commodities.^[20] It also has been actively involved in seeking customer protection by taking action against exploitative lending apps like Opay and has been actively against practices like price gouging, fake products, and unfair terms.^[21] It has also engaged in advocacy via public awareness campaigns and stakeholder consultations.^[22]

A critical feature of Nigeria’s framework is the concurrent jurisdiction between the FCCPC and sector regulators like Nigerian Communications Commissions (NCC) for Telecoms, Nigerian Electricity Regulatory Commission (NERC) for Electricity, Central Bank of Nigeria (CBN) for Banking, and Nigerian Upstream Petroleum Regulatory Commission (NUPRC) for Oil & Gas. The FCCPA attempts to manage this through its jurisdiction as granted by section 104 of the FCCPA where the FCCPC has primary jurisdiction over competition and consumer protection matters across all sectors^[23]

According to section 105 and 106 of the FCCPA offers Consultation and Cooperation by mandating the FCCPC to consult and cooperate with sector regulators, particularly concerning regulated industries. Usually Memoranda of Understanding (MoUs) are envisaged to define practical cooperation.^[24] Sector regulators retain their statutory powers, including those related to competition within their specific sectors, but the FCCPC’s authority on competition and consumer protection is overarching.^[25] This creates potential for jurisdictional conflicts and forum shopping, requiring careful management through MoUs and inter-agency coordination. The effectiveness of this model remains an area of practical development and occasional tension.^[26]

Conclusion and Recommendations

This Article has embarked on a critical examination of the intricate relationship between competition and energy regulation in Nigeria, focusing primarily on the electricity and downstream petroleum sectors. The journey has navigated the historical evolution of these sectors, the existing regulatory frameworks, the persistent challenges to fostering effective competition, and the tangible impacts on market efficiency, consumer welfare, and national development. Drawing on theoretical underpinnings of competition economics and regulatory governance, combined with empirical analysis of the Nigerian context, this chapter synthesizes the key findings, elucidates the broader implications, acknowledges limitations, and proposes concrete recommendations for policy, regulation, and future research. The aim is to contribute to the discourse on creating a more competitive, efficient, and sustainable energy market in Nigeria.

This article highlights several significant problems in the regulatory terrain of competition;

1. Persistent Structural and Behavioral Barriers

Despite liberalisation efforts, notably the Electricity Act (2023) for electricity and the PIA 2021 for petroleum, both sectors remain heavily constrained by structural barriers. In electricity, natural monopoly segments transmission coexists with potentially competitive segments through generation and distribution. Especially transmission capacity and gas supply, market liquidity issues, and the financial and operational weaknesses of Discos.^[27]

The downstream petroleum sector faces similar challenges, including inadequate refinery capacity leading to import dependence, logistical bottlenecks, foreign exchange volatility, and persistent subsidy legacies distorting pricing signals.^[28]Behavioral barriers, such as anti-competitive practices like collusion, abuse of dominance by legacy players, regulatory capture, and insufficient enforcement capacity, further impede competitive dynamics.

2. Regulatory Gaps and Overlaps

While NERC for electricity and the Authority, PIA – downstream petroleum. Provides dedicated regulatory frameworks, significant gaps and overlaps persist, Key issues identified includes

• Limited Competition Focus: The mandates of NERC and the Authority prioritize sector stability and investment attraction, sometimes at the expense of proactively fostering competition. Explicit competition advocacy and enforcement powers within these agencies need strengthening.^[29]
• Interface with FCCPC: The relationship between sector regulators (NERC, Authority) and the general competition authority (FCCPC) remains ambiguous, leading to potential jurisdictional conflicts, duplication of efforts, or regulatory gaps, particularly concerning cross-sectorial anti-competitive conduct.
• Inconsistent Application & Enforcement: Regulatory rules e.g., market rules in electricity; pricing regulations in petroleum are often inconsistently applied or weakly enforced due to capacity constraints, political interference, and legal challenges, undermining regulatory credibility and market confidence.

3. Consumer Welfare Impacts: The lack of effective competition manifests directly in poor consumer outcomes. In electricity, consumers face high tariffs relative to the quality and reliability of supply, frequent outages, and low voltage. Limited choice especially for end-users and inadequate redress mechanisms.
4. Investment Deterrence: Regulatory uncertainty, market distortions (e.g., tariff shortfalls, subsidy ambiguities), and the perception of an unlevel playing field significantly deter much-needed private investment in generation, transmission, distribution infrastructure, refining, storage, and retail outlets.
5. The PIA as an Incomplete Solution: While the Petroleum Industry Act (PIA) 2021 represents a significant step towards restructuring the petroleum sector and introducing clearer regulatory frameworks (including the creation of the Authority), its full impact on fostering downstream competition is yet to be realized. Implementation challenges, politics, and the slow pace of refinery development (Dangote and modular refineries) continue to constrain competitive forces.

Recommendations

Based on the analysis, the following recommendations are proposed to enhance competition within Nigeria’s energy regulatory framework

1. Strengthen Regulatory Mandates and Capacity

There is the Amend enabling Acts (EPSRA, PIA) to explicitly enshrine the promotion and protection of competition as a core objective alongside stability and investment. Establish specialized, well-resourced competition units within NERC and the Authority, staffed with expertise in competition economics and law. Significantly invest in continuous training for regulatory staff on competition analysis, market monitoring techniques, investigation, and enforcement. Ensure regulators have sustainable, independent funding sources (e.g., levies, fees) to reduce vulnerability to political pressure and enhance operational capacity.

2. Clarify and Enhance FCCPC-Sector Regulator Interface

Establish clear, publicly available Memoranda of Understanding (MOUs) between FCCPC, NERC, and the Authority delineating jurisdictional boundaries, consultation procedures, and cooperation mechanisms for handling anti-competitive practices (e.g., which agency leads on sector-specific vs. cross-sectoral cartels). There is the need to also create mechanisms for joint investigations and enforcement actions where conduct impacts both sector-specific regulation and general competition law. FCCPC should proactively engage in advocacy with sector regulators on incorporating competition principles into rulemaking and market design.

3. Address Structural Barriers Aggressively

Accelerate investments in transmission network expansion and strengthening (e.g., through public-private partnerships with clear incentives) to unlock competition in generation and enable effective wholesale markets.^[30] Implement targeted policies and incentives to resolve gas supply constraints such as commercial, infrastructure, security for power generation

Conclusion

The quest for effective competition within Nigeria’s energy sector is not merely an economic ideal but a fundamental necessity for achieving energy security, affordability, and sustainable development. The path forward requires unwavering commitment and decisive action. Regulators must be empowered, resourced, and mandated to become champions of competition. Policymakers must prioritize resolving infrastructure bottlenecks and depoliticizing energy pricing. Investors need a credible, predictable, and level playing field. Consumers deserve reliable service, fair prices, and a voice. Implementing the recommendations outlined such as strengthening regulatory focus and capacity, clarifying jurisdictions, tackling structural barriers, enhancing market design, enforcing rules rigorously, and empowering consumers provides a concrete roadmap.

Fostering vibrant competition in Nigeria’s energy markets is a complex and long-term endeavor. It demands sustained political will, robust institutions, and continuous adaptation. However, the potential rewards are a more efficient, resilient, and affordable energy system that powers inclusive economic growth, making this pursuit not only worthwhile but essential for Nigeria’s future prosperity.

[1] World Bank, Nigeria Development Update: The Continuing Urgency of Business Unusual (June 2023); International Energy Agency (IEA), Africa Energy Outlook 2022.

[2] Ohiare S., Expanding Electricity Access in Rural Nigeria: The Impact of Institutional Reforms, OPEC Energy Review (2015).

[3] Olumuyiwa Fashuyi B., Regulatory Mechanisms for Stimulating Power Sector Reform in Nigeria, (2022)

[4] Section 1, National Electric Power Authority Act (Repealed by EPSRA 2005). See also: Amadi, S. (2012). The Nigerian Electricity Regulatory Commission: The Challenges of Power Sector Reform. NIALS Press.

[5] Section 90, Nigerian Communications Act (NCA) 2003. Empowers the NCC to promote fair competition and prevent anti-competitive practices.

[6] Section 74, Electric Power Sector Reform Act (EPSRA) 2005 now section 34 of the Electricity Act 2023 grants NERC powers regarding competition and market power abuse in electricity.

[7] Section 164(1), FCCPA 2018. Explicitly repeals the Consumer Protection Council Act and states its supremacy over competition provisions in other laws.

[8] Section 59(4), FCCPA 2018 lists hardcore cartel activities as per se violations.

[9] Sections 59(2), 60, 61, FCCPA 2018. Outline the assessment framework for vertical and other horizontal agreements.

[10] Section 72(2), FCCPA 2018. Defines the prohibition on abuse of dominant position.

[11] Section 92(1-4), Federal Competition and Consumer Protection Act 2018. Defines “merger” and outlines the notification thresholds (specified in regulations).

[12] Sections 95-99, Federal Competition and Consumer Protection Act 2018. Detail the merger review procedure and assessment criteria (SLC test).

[13] Part XVII (Enforcement of Consumer Rights), FCCPA 2018.

[14] Sections 27-37, FCCPA 2018. Detail the FCCPC’s extensive investiga

[15] Section 69 (Penalties for Contraventions), FCCPA 2018. Outline penalty calculation methodologies.

[16] Section 47(1), FCCPA 2018. Defines the broad jurisdiction of the CCPT.

[17] Section 47(2), FCCPA 2018. Grants the CCPT powers equivalent to a High Court.

[18] Section 17 FCCPA 2018. Lists the core functions of the FCCPC.

[19] FCCPC Annual Reports & Merger Decisions Database Retrieved 26^th July 2025 https://fccpc.gov.ng

[20] FCCPC Press Releases, FCCPC engages GTbank, MTN and Air peace over possible violations, Retrieved 26^th July 2025 https://fccpc.gov.ng  See also: FCCPC Press Release, FCCPC warns bank against violations of customers rights Retrieved 26^th July 2025https://fccpc.gov.ng

[21] Proshare Press release, FCCPC orders fintech lenders to stop loan services, Retrieved 26^th July, 2025 from https://proshare.co/articles/fccpc

[22] FCCPC Advocacy Page & Social Media Channels. Retrieved 26^th July 2025 https://fccpc.gov.ng

[23] Section 104(1), Federal Competition and Consumer Protection Act 2018.

[24]  Section 105 (Cooperation between Commission and Sector Regulators), Section 106 (Memorandum of Understanding), Federal Competition and Consumer Protection Act 2018.

[25] OECD. (2022). Peer Review of Competition Law and Policy: Nigeria. Highlights the complexities of the concurrent jurisdiction model. Retrieved 26^th July, 2025 https://oecd.org/daf/competition/nigeria-2022-peer-review-competition.html

[26] Ehizuelen, M. M. (2021). Navigating Concurrent Jurisdiction: FCCPA 2018 and Sector-Specific Regulation in Nigeria. NIALS Journal of Law and Public Policy, 4(1), 112-134. Discusses practical conflicts and potential solutions.

[27] Nigerian Electricity Regulatory Commission (NERC), Q4 2023 Market Competition Report, Abuja: NERC, 2024, p. 15.

[28] Petroleum Industry Act (PIA) Implementation Committee, First Year Progress Report, Abuja: Federal Ministry of Petroleum Resources, 2022, pp. 32-35

[29] Emeka Duruigbo, “The Quest for Effective Regulation of the Nigerian Electricity Market: Challenges and Prospects,” Nigerian Journal of Law and Public Policy, vol. 8, no. 1, 2022, pp. 45-78.

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By: Moyinoluwa Temilade Oluyemi