The Federal Competition and Consumer Protection Commission has questioned the slow pace of petrol price reductions across Nigeria despite the sharp decline in global crude oil prices, warning that operators in the downstream petroleum sector could face regulatory action if evidence of consumer exploitation is established.
The commission said preliminary findings from its ongoing surveillance of the petroleum market show that depot and retail petrol prices have only declined marginally, even as international crude oil prices have fallen significantly from recent highs.
Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, described the market’s response as troubling, noting that marketers are usually quick to increase pump prices when crude oil prices rise but are much slower to pass on the benefits of lower prices to consumers.
“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,” Bello said.
He explained that although the commission does not regulate fuel prices in a deregulated market, it is empowered under the Federal Competition and Consumer Protection Act to protect consumers from unfair, exploitative and anti-competitive practices.
“Competitive markets must work fairly in both directions,” he added.
The FCCPC’s concerns come as global crude oil prices have dropped sharply following the easing of geopolitical tensions in the Middle East, including a ceasefire between the United States and Iran and the reopening of key international shipping routes.
Despite the decline, the commission noted that petrol continues to sell at relatively high prices nationwide, with many filling stations dispensing the product at about ₦1,200 per litre.
It also observed that some local refiners are selling petrol at gantry prices ranging from ₦1,025 to ₦1,075 per litre, raising concerns that consumers are not enjoying the full benefits of lower international oil prices.
In a statement signed by the FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu, the commission said its market surveillance revealed only minimal price reductions by refiners, depot operators, marketers and retail outlet operators.
“The FCCPC has expressed concern over findings from an ongoing surveillance of the downstream petroleum market suggesting undue exploitation of consumers,” the statement said.
While acknowledging that exchange rate movements, transportation, financing, refining and distribution costs all influence domestic fuel prices, the commission maintained that prevailing market conditions should ordinarily have resulted in more substantial reductions at the pump.
Bello reiterated that market liberalisation does not exempt businesses from complying with competition laws or protecting consumer interests.
“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 forms of consumer exploitation as it intensifies oversight of the downstream petroleum sector.
