The Federal Competition and Consumer Protection Commission (FCCPC) has raised concerns over the slow pace at which consumers are benefiting from declining global crude oil prices, warning that it will not hesitate to sanction operators found engaging in exploitative practices in Nigeria’s downstream petroleum sector.
The commission said its ongoing surveillance of the downstream market indicates that reductions in pump prices by local refiners, depot operators, marketers and retail outlets have not reflected the significant drop recorded in international crude oil prices.
In a statement issued on Sunday, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, clarified that although the commission does not regulate fuel prices in Nigeria’s deregulated downstream market, it has the statutory responsibility to ensure fair competition and protect consumers from exploitative practices.
According to Bello, the FCCPC’s mandate under the Federal Competition and Consumer Protection Act (FCCPA) 2018 includes promoting competitive markets, preventing anti-competitive conduct and safeguarding consumers against unfair, deceptive and exploitative business behaviour.
He expressed concern that petroleum marketers often respond immediately by increasing pump prices whenever global crude oil prices rise but are noticeably slower to reduce prices when market conditions improve.
“We are concerned that while dealers often respond swiftly by hiking pump prices whenever crude prices rise, it is curious that it takes so long for consumers to benefit significantly when crude prices fall. Competitive markets must work fairly in both directions,” Bello said.
The commission noted that international crude oil prices have dropped to about $73 per barrel following the ceasefire between the United States and Iran and the reopening of the Strait of Hormuz.
It recalled that crude prices had surged to as high as $120 per barrel in April before retreating to levels last seen in February.
According to the FCCPC, the earlier increase in global crude prices led refiners and marketers to raise petrol prices nationwide to between ₦1,350 and ₦1,500 per litre, while diesel sold for about ₦2,000 per litre during the period of heightened geopolitical tensions between April and May.
It further observed that although petrol sold for between ₦800 and ₦900 per litre in February, the current nationwide average remains around ₦1,200 per litre.
This is despite reports that some local refiners have reduced their ex-depot prices to between ₦1,025 and ₦1,075 per litre.
While acknowledging that domestic fuel pricing is influenced by several factors, including refining costs, foreign exchange fluctuations, logistics, financing and distribution expenses, the commission maintained that consumers should have experienced more substantial price relief as crude oil prices declined.
Bello stressed that market liberalisation does not exempt businesses from their obligation to compete fairly or respect consumer rights.
He warned that the commission would investigate and take enforcement action wherever there is credible evidence of anti-competitive conduct, consumer exploitation or any violation of the FCCPA.
The FCCPC also encouraged Nigerians to report suspected cases of unfair pricing, anti-competitive behaviour and other consumer rights violations through its official complaint channels.
