FCCPC warns oil marketers against profiteering as crude prices fall

The Federal Competition and Consumer Protection Commission (FCCPC) has warned oil marketers against exploiting consumers, saying the current retail prices of petrol do not reflect the sharp decline in global crude oil prices.

In a statement issued on Sunday, the Commission said its ongoing surveillance of the downstream petroleum sector had uncovered indications of consumer exploitation, as recent reductions in petrol prices by refiners, depot operators and marketers remain insignificant despite the sustained fall in crude oil prices.

According to the FCCPC, global crude oil prices have dropped to about 73 dollars per barrel following the ceasefire between the United States and Iran and the reopening of the Strait of Hormuz. The agency noted that crude prices had climbed to about 120 dollars per barrel at the height of tensions in the Middle East between April and May, prompting a swift increase in petrol pump prices across Nigeria.

The Commission observed that while crude oil prices have now returned to levels recorded in February, retail fuel prices have remained relatively high.

It recalled that petrol sold for between ₦800 and ₦900 per litre in February, but rose sharply to between ₦1,350 and ₦1,500 per litre during the period of heightened geopolitical tensions. Despite the subsequent drop in crude oil prices, petrol is still being sold at an average of about ₦1,200 per litre, while some local refiners have fixed ex-depot prices between ₦1,025 and ₦1,075 per litre.

The Commission acknowledged that domestic fuel prices are influenced by several factors, including refining costs, foreign exchange fluctuations, logistics, financing and distribution expenses. However, it maintained that consumers should benefit from lower crude oil prices through competitive market pricing.

Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said although the Commission does not regulate petrol prices in Nigeria’s deregulated downstream petroleum sector, it has a statutory responsibility to ensure consumers are protected from unfair and exploitative 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 questioned why marketers often respond immediately by increasing pump prices whenever crude oil prices rise, yet delay passing on the benefits to consumers when prices fall.

“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.

Bello warned that deregulation does not absolve businesses of the responsibility to compete fairly or respect consumer rights.

According to him, the Commission will investigate and sanction any company found engaging in anti-competitive conduct, consumer exploitation or any practice that violates the Federal Competition and Consumer Protection Act.

“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.

He also urged Nigerians to continue reporting suspected price manipulation, anti-competitive practices and other unfair market behaviour through the Commission’s official complaint channels.

The FCCPC’s warning comes days after the Dangote Refinery reduced its ex-depot petrol price from ₦1,175 to ₦1,125 per litre, following the continued decline in international crude oil prices. Brent crude, the global oil benchmark, recently fell to about 72.97 dollars per barrel, its lowest level since February.