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The Federal Competition and Consumer Protection Commission (FCCPC) has raised concerns over possible consumer exploitation in Nigeria’s downstream petroleum sector, following the failure of fuel prices to fall significantly despite a sharp drop in global crude oil prices.
The commission said its ongoing market surveillance showed that local refiners, depot operators, marketers and filling station owners had made only marginal reductions in fuel prices, despite the steep decline in international crude oil prices.
In a statement issued on Sunday by the FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu, the commission said a review of prevailing gantry and retail prices indicated that consumers had yet to benefit fully from lower global oil prices.
According to the statement, the commission’s review revealed only token price reductions that did not reflect the scale of the fall in crude oil prices.
The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said the commission was concerned by what appeared to be a one-sided response to movements in crude oil prices.
He noted that operators in the downstream sector often increase pump prices quickly when crude oil prices rise but delay passing on the benefits to consumers when prices fall.
Bello clarified that the FCCPC does not regulate petroleum prices in Nigeria’s deregulated downstream market. However, he said the commission remains responsible for promoting fair competition and protecting consumers from exploitative and anti-competitive practices under the Federal Competition and Consumer Protection Act, 2018.
The commission’s concerns follow a sharp drop in global crude oil prices after a ceasefire agreement between the United States and Iran and the reopening of the Strait of Hormuz.
Although crude oil prices have fallen to about 73 dollars per barrel from around 120 dollars per barrel in April, petrol still sells for an average of about ₦1,200 per litre across Nigeria. Some local refiners currently offer gantry prices between ₦1,025 and ₦1,075 per litre.
While acknowledging that exchange rates, logistics, financing, refining and distribution costs also influence domestic fuel prices, the FCCPC maintained that competitive market forces should have resulted in more substantial reductions at filling stations.
Bello warned that the commission would investigate and take enforcement action where credible evidence showed anti-competitive conduct, consumer exploitation or other violations of the law.
He also urged Nigerians to report suspected cases of price manipulation and other unfair market practices through the commission’s complaint channels.
