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This investigation examines the Applicability of the Rule in Rylands v. Fletcher to Petroleum activities in Nigeria. For many years the Nigerian Government had laid emphasis on the need for exploitation of oil for developmental purposes without making adequate provisions for the negative impact of these petroleum activities to the host communities. The Rule in Rylands v. Fetcher is one of the principles at common law, which is to the effect that, a person who for his own purpose brings on his land, collects and keeps there anything likely to do mischief, keeps it at his own peril if it escapes and causes harm to another person, is prima facie answerable to all the likely damages which is the natural consequence of its escape. The devastating effect of petroleum pollution on the land, water and air which forms the eco-system is not novel to our environment. This work analyzes the applicability of the Rule in Rylands v. Fletcher to petroleum activities in Nigeria with the aim of reaching an appropriate compensation payable by the multinational companies at the instance of pollution done to the host communities in the course of their activities in Nigeria.