THE Federal Competition and Consumer Protection Commission (FCCPC) has warned operators in the downstream petroleum sector against exploiting consumers by failing to reflect the sharp decline in global crude oil prices at retail filling stations.
News Point Nigeria reports that the Executive Vice Chairman and Chief Executive Officer of the Commission, Tunji Bello, expressed concern that ongoing surveillance of the downstream petroleum market had revealed only marginal reductions in gantry prices by local refiners, marketers, depot operators, and retail outlet operators despite the significant drop in global crude oil prices.
According to a statement issued by the FCCPC spokesman, Ondaje Ijagwu, Bello stressed that although the commission does not regulate or approve petroleum prices in Nigeria’s deregulated downstream market, it would not hesitate to investigate and sanction operators found engaging in anti-competitive, deceptive, or exploitative practices in violation of the Federal Competition and Consumer Protection Act (FCCPA), 2018.
“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.
According to the FCCPC boss, international crude oil prices have dropped sharply to about $73 per barrel following the ceasefire agreement between the United States and Iran and the reopening of the Strait of Hormuz, compared with a peak of about $120 per barrel recorded in April at the height of tensions in the Gulf.
The commission noted that crude oil prices have effectively returned to their February levels, yet the decline has not been matched by a commensurate reduction in domestic fuel prices.
It recalled that the earlier surge in crude prices prompted local refiners and marketers to rapidly increase pump prices, with petrol selling for between N1,350 and N1,500 per litre, while diesel rose to about N2,000 per litre as geopolitical tensions escalated between April and May.
By comparison, Premium Motor Spirit (PMS) sold for between N800 and N900 per litre in February.
However, despite the reversal in global crude prices, the FCCPC observed that petrol currently sells at an average of about N1,200 per litre nationwide, while some local refiners have fixed gantry prices between N1,025 and N1,075 per litre.
As of the time of filing this report, global crude oil benchmark Brent crude futures traded at $72.44 per barrel, down from over $100 recorded before the conflict.
While acknowledging that domestic fuel prices are influenced by several commercial variables, including refining costs, foreign exchange movements, logistics, financing, and distribution expenses, Bello maintained that competitive market forces should have enabled consumers to benefit more quickly from lower input costs.
He stressed that market liberalisation does not absolve businesses of their responsibility to compete fairly or deny consumers the right to fair pricing.
“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,” Bello stated.
He urged consumers to report suspected anti-competitive conduct, misleading pricing practices, and other forms of unfair market behaviour through the commission’s established complaint channels.
Bello assured Nigerians that every credible complaint submitted to the commission would receive appropriate attention.