By Seun Ibiyemi
The Federal Competition and Consumer Protection Commission (FCCPC) has raised concerns over the slow pace of reductions in petrol prices across Nigeria despite the sharp decline in global crude oil prices, warning that operators found exploiting consumers could face regulatory sanctions.
The commission said preliminary findings from its ongoing surveillance of the downstream petroleum sector showed that many local refiners, depot owners, marketers and filling station operators had made only marginal adjustments to pump prices, despite a significant drop in international crude oil prices in recent weeks.
In a statement issued on Sunday by the FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu, the agency said its review of gantry and retail prices indicated that the benefits of falling crude oil prices had yet to be substantially passed on to consumers.
According to the commission, the reductions recorded so far were insignificant compared with the sharp decline in crude oil prices on the global market.
The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said the development raised concerns about fairness in the deregulated downstream petroleum market.
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He noted that marketers typically increase pump prices quickly whenever crude oil prices rise but are often reluctant to reduce prices when international oil prices fall.
“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.
“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.
The commission’s position comes amid a sharp decline in international crude oil prices following a ceasefire between the United States and Iran and the reopening of the Strait of Hormuz, a critical global oil shipping route.
Although global crude oil prices have reportedly fallen from about $120 per barrel during heightened Middle East tensions to around $73 per barrel, petrol prices in Nigeria have remained elevated.
While petrol sold for between N800 and N900 per litre in February, the earlier increase in crude oil prices pushed pump prices to between N1,350 and N1,500 per litre in many parts of the country.
Despite the subsequent fall in crude prices, the average retail price of petrol remains around N1,200 per litre.
The FCCPC acknowledged that domestic fuel prices are influenced by several factors, including exchange rate movements, logistics, financing, refining and distribution costs.
However, it maintained that effective market competition should ordinarily result in more noticeable reductions in retail prices whenever crude oil prices decline significantly.
Bello stressed that deregulation does not exempt industry operators from complying with competition and consumer protection laws.
“Market liberalisation does not diminish businesses’ obligations to compete fairly or consumers’ right to fair treatment.
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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 also urged Nigerians to report suspected cases of price manipulation, anti-competitive practices and other forms of consumer exploitation through its official complaint channels.
The FCCPC’s warning is expected to intensify public debate over the effectiveness of Nigeria’s deregulated petroleum market as consumers continue to question why lower global crude oil prices have not translated into corresponding reductions at filling stations.
