THE Federal Competition and Consumer Protection Commission (FCCPC) has raised concerns over what it described as the continued exploitation of Nigerian consumers by operators in the downstream petroleum sector, warning that businesses found engaging in unfair pricing practices risk sanctions.
The Commission said its ongoing surveillance of the downstream oil market revealed that recent reductions in gantry and retail fuel prices by local refiners, depot operators, marketers and filling station operators were insignificant and did not reflect the sharp decline in global crude oil prices.
Speaking on the development, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, Mr Tunji Bello, stressed that although the Commission does not regulate petroleum prices in Nigeria’s deregulated downstream market, it has a statutory responsibility to ensure fair competition and protect consumers from exploitative business practices.
“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.
He noted that the Commission was worried by the apparent reluctance of petroleum marketers to reduce pump prices in line with falling crude oil prices, despite their swift response whenever international crude prices increase.
“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.
According to the FCCPC, crude oil prices have declined significantly following the ceasefire agreement between the United States and Iran and the reopening of the Strait of Hormuz, a key global shipping route for crude exports.
The Commission noted that international crude prices, which peaked at about 120 dollars per barrel in April during heightened tensions in the Gulf region, have now fallen to approximately 73 dollars per barrel, returning to levels last recorded in February.
It recalled that the earlier surge in crude prices prompted marketers and refiners across Nigeria to increase pump prices rapidly, with Premium Motor Spirit (PMS), popularly known as petrol, selling for between ₦1,350 and ₦1,500 per litre, while diesel climbed to about ₦2,000 per litre during the peak of the crisis between April and May.
By contrast, the Commission observed that when crude traded at similar levels in February, petrol sold for between ₦800 and ₦900 per litre.
Despite the current drop in international crude prices, the FCCPC said petrol is still being sold at an average of about ₦1,200 per litre nationwide, while some local refiners have only adjusted their gantry prices to between ₦1,025 and ₦1,075 per litre.
The Commission warned that it would continue monitoring pricing trends across the downstream petroleum value chain and would not hesitate to invoke the provisions of the Federal Competition and Consumer Protection Act, 2018, against any operator found engaging in exploitative, anti-competitive or deceptive pricing practices.
The FCCPC reiterated its commitment to ensuring that the benefits of lower global crude oil prices are fairly transmitted to Nigerian consumers through competitive market practices, rather than being absorbed by profiteering operators.
