The Federal Competition and Consumer Protection Commission (FCCPC) has expressed concern over the slow pace of reductions in petrol prices across Nigeria despite the sharp decline in international crude oil prices, warning that consumers may not be receiving the full benefits of the market downturn.
According to the commission, findings from an ongoing monitoring exercise indicate that refiners, depot owners, petroleum marketers and filling station operators have made only minimal adjustments to fuel prices, even though crude oil prices have dropped significantly on the global market.
The position was contained in a statement released on Sunday by the FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu, who said an assessment of current gantry and pump prices suggested that the reductions implemented so far were far below what prevailing global market conditions would ordinarily justify.
The statement read, “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.
“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.”
The commission’s Executive Vice Chairman and Chief Executive Officer, Tunji Bello, said the agency was troubled by what appeared to be an imbalance in how operators respond to fluctuations in international oil prices.
He observed that marketers are usually quick to raise pump prices whenever crude oil becomes more expensive but are far slower to reduce prices when the global market moves in the opposite direction.
Bello said, “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 commission’s intervention follows the recent drop in global crude oil prices after tensions in the Middle East eased with a ceasefire between the United States and Iran and the reopening of the Strait of Hormuz, one of the world’s most strategic oil shipping routes.
Although crude prices have fallen to about $73 per barrel, down sharply from the $120 per barrel recorded in April during fears of supply disruptions, domestic petrol prices have remained elevated.
Earlier spikes in crude oil prices had triggered almost immediate increases at filling stations, with petrol selling for between ₦1,350 and ₦1,500 per litre in many parts of the country, while diesel prices climbed to around ₦2,000 per litre.
By comparison, petrol sold for between ₦800 and ₦900 per litre in February before the surge in international oil prices.
Despite the subsequent decline in crude prices, the FCCPC noted that petrol is still averaging about ₦1,200 per litre nationwide, while gantry prices offered by some local refiners currently range between ₦1,025 and ₦1,075 per litre.
While acknowledging that pump prices are influenced by factors such as exchange rate movements, logistics, financing costs, refining expenses and distribution charges, the commission maintained that market competition should ordinarily have produced more noticeable reductions for consumers.
Bello said, “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 also encouraged Nigerians to report suspected cases of price manipulation, anti-competitive conduct and other unfair business practices through the commission’s established complaint channels.
The FCCPC’s latest position is expected to renew public debate over the effectiveness of Nigeria’s deregulated downstream petroleum market, as consumers and industry observers continue to question why significant declines in international crude oil prices have not been reflected in pump prices.
Since the removal of fuel subsidy and the liberalisation of the downstream petroleum sector, domestic fuel prices have become increasingly linked to global crude oil movements and foreign exchange dynamics. However, consumer advocates have repeatedly argued that while marketers rapidly adjust prices upward during periods of rising crude costs, reductions are often delayed when market conditions improve.
The commission said its ongoing surveillance could lead to regulatory action if evidence emerges that pricing practices in the sector violate competition laws or unfairly disadvantage consumers.
