The Federal Competition and Consumer Protection Commission (FCCPC) has warned operators in Nigeria’s downstream petroleum sector against exploiting consumers by failing to reflect the significant decline in global crude oil prices in retail fuel prices.
As of the time of filing this report, global benchmark Brent crude was trading at $72.44 per barrel, down from over $100 per barrel recorded before the recent conflict.
According to a statement issued on Sunday, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said the Commission’s ongoing surveillance of the downstream petroleum market showed that recent reductions in gantry prices by local refiners, depot operators, marketers and retail outlet operators have been minimal and do not adequately reflect the sharp drop in international crude oil prices.
The statement, signed by FCCPC spokesperson Ondaje Ijagwu, explained that although the Commission does not regulate or approve fuel prices in Nigeria’s deregulated downstream petroleum sector, it has the authority to investigate and sanction businesses involved in anti-competitive, deceptive or exploitative practices under the Federal Competition and Consumer Protection Act (FCCPA), 2018.
Bello stated:
“To be clear, the Commission does not regulate or approve petroleum prices in a deregulated downstream market. Our responsibility under the Federal Competition and Consumer Protection Act, 2018, is to promote competitive markets, prevent anti-competitive conduct, and protect consumers from unfair, deceptive, and exploitative business practices.
“We are concerned that while dealers often respond swiftly by hiking pump prices whenever crude prices rise, it is curious that it is taking forever for consumers to benefit significantly when crude prices fall. Competitive markets must work fairly in both directions.”
The FCCPC noted that international crude oil prices have declined significantly to about $73 per barrel following the ceasefire agreement between the United States and Iran and the reopening of the Strait of Hormuz. This represents a sharp drop from the peak of about $120 per barrel recorded in April when tensions in the Gulf region intensified.
According to the Commission, although crude oil prices have returned to levels last seen in February, domestic fuel prices have not experienced a similar reduction.
Earlier this year, the surge in global oil prices prompted refiners and marketers to increase petrol prices rapidly, with Premium Motor Spirit (PMS) selling between ₦1,350 and ₦1,500 per litre, while diesel rose to around ₦2,000 per litreduring the peak of geopolitical tensions between April and May.
By comparison, petrol sold for between ₦800 and ₦900 per litre in February.
Despite the recent decline in international crude prices, the Commission observed that petrol is still being sold at an average price of about ₦1,200 per litre nationwide, while some local refiners currently maintain gantry prices ranging from ₦1,025 to ₦1,075 per litre.
While acknowledging that domestic fuel prices are influenced by factors such as refining costs, foreign exchange fluctuations, logistics, financing and distribution expenses, Bello maintained that market competition should enable consumers to benefit more quickly whenever input costs decline.
He added:
“Market liberalisation does not diminish businesses’ obligations to compete fairly or consumers’ right to fair treatment.
“Where credible evidence indicates conduct that undermines competition, exploits consumers, or otherwise contravenes the Federal Competition and Consumer Protection Act, the Commission will investigate and take appropriate enforcement action.”
The FCCPC also urged consumers to report suspected anti-competitive practices, misleading pricing and other unfair business conduct through its official complaint channels, assuring the public that every credible complaint would receive prompt attention.
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