The Federal Competition and Consumer Protection Commission (FCCPC) has raised concerns over what it described as the failure of petroleum marketers to reflect the sharp decline in global crude oil prices in domestic fuel prices.
The commission said its ongoing surveillance of Nigeria’s downstream petroleum market showed that local refiners, depot operators, marketers and filling station owners had implemented only marginal reductions in petrol prices despite a significant drop in international crude oil prices.
In a statement issued on Sunday by Ondaje Ijagwu, the FCCPC’s director of corporate affairs, the commission said its review of gantry and retail prices indicated that consumers had yet to benefit fully from the easing in global oil prices.
“The Federal Competition and Consumer Protection Commission has expressed concern over findings from an ongoing surveillance of the downstream petroleum market suggesting undue exploitation of consumers,” the statement said.
It added that “a review of the gantry prices of local refiners, marketers, depot operators and retail outlet operators revealed token reductions in prices that are not commensurate with the steep fall in crude prices in the global market.”
Tunji Bello, the executive vice chairman and chief executive officer of the FCCPC, said the commission was disturbed by what appeared to be a one-sided response by operators to fluctuations in crude oil prices.
According to him, marketers are often quick to increase pump prices whenever crude oil prices rise but slow to reduce them when global prices fall.
“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,” Bello said.
“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,” he added.
The commission’s position follows a sharp decline in global crude oil prices after the United States and Iran reached a ceasefire agreement and the Strait of Hormuz, a major global shipping route for crude, reopened.
Crude oil prices, which had climbed to about $120 per barrel in April amid supply concerns, have since dropped to around $73 per barrel. The earlier increase triggered a rapid rise in local fuel prices, with petrol selling for between ₦1,350 and ₦1,500 per litre in several parts of the country.
Although crude prices have since fallen significantly, petrol is still selling for an average of about ₦1,200 per litre nationwide, while gantry prices from some local refiners range between ₦1,025 and ₦1,075 per litre.
While acknowledging that domestic fuel prices are influenced by exchange rate movements, logistics, financing, refining and distribution costs, the FCCPC maintained that market forces should ordinarily have resulted in more noticeable reductions at the pumps.
Bello warned that market liberalisation does not exempt businesses from complying with competition and consumer protection laws.
“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,” he said.
The commission urged Nigerians to report suspected cases of price manipulation, anti-competitive practices and other unfair market conduct through its official complaint channels as it continues monitoring activities in the downstream petroleum sector.
