The Federal Competition and Consumer Protection Commission (FCCPC) has expressed concern that Nigerians are not enjoying the benefits of the recent decline in global crude oil prices, warning petrol marketers against what it described as unfair pricing practices.
The Commission said findings from its ongoing monitoring of the downstream petroleum sector indicate that the reduction in petrol prices has been too small compared to the sharp fall in international crude oil prices.
In a statement issued on Sunday by its Director of Corporate Affairs, Ondaje Ijagwu, the FCCPC said a review of prevailing gantry and retail prices showed that consumers were yet to receive the full benefits of the easing in global oil prices.
According to the Commission, local refiners, depot operators and marketers were quick to increase pump prices when crude oil prices rose in the international market, but have been slow to reduce prices despite the recent decline in crude prices.
The FCCPC noted that petrol is still being sold at an average of about N1,200 per litre across the country, while some local refiners are selling the product to marketers at gantry prices ranging between N1,025 and N1,075 per litre.
It said the modest reductions recorded so far do not reflect developments in the global oil market and have raised concerns about whether consumers are being treated fairly.
“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,” the statement said.
“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 Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said the Commission was worried by what appeared to be a one-sided approach to petrol pricing in the deregulated market.
According to him, operators in the downstream sector respond almost immediately by increasing pump prices whenever international crude oil prices rise, but fail to make similar adjustments when prices decline.
He described the situation as unfair to consumers, stressing that competitive markets should operate fairly regardless of whether prices are rising or falling.
“To be clear, the Commission does not regulate or approve petroleum prices in a deregulated downstream market,” Bello said.
“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.”
He explained that while the Commission has no authority to fix petrol prices under Nigeria’s deregulated fuel market, it is empowered to investigate practices that may amount to exploitation or anti-competitive behaviour.
According to Bello, the FCCPC will continue to monitor pricing trends to ensure that consumers are not unfairly disadvantaged.
“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,” he said.
“Competitive markets must work fairly in both directions.”
Nigeria fully embraced the deregulation of the downstream petroleum sector after the removal of fuel subsidy in May 2023. Under the policy, petrol prices are expected to be determined by market forces rather than government regulation.
Since then, pump prices have fluctuated several times in response to changes in international crude oil prices, exchange rate movements, shipping costs and supply conditions.
The entry of local refining capacity, particularly the Dangote Petroleum Refinery, has also introduced greater competition into the market, with marketers now sourcing products from different suppliers.
Industry observers had expected that the recent decline in global crude oil prices would lead to more noticeable reductions in petrol prices across the country.
However, many motorists and consumers have complained that pump prices remain high despite reports of lower crude prices in the international market.
The high cost of petrol continues to affect transportation, food prices and the overall cost of living, as fuel remains a major input for businesses and households across Nigeria.
Transport operators have argued that expensive petrol has forced them to increase fares, while businesses that rely on petrol-powered generators continue to struggle with rising operating costs.
Nevertheless, they note that where there is effective competition, consumers should eventually benefit from sustained reductions in international oil prices.
The FCCPC’s latest warning signals closer scrutiny of activities in the downstream petroleum sector as the Commission seeks to ensure that deregulation does not expose Nigerians to unfair business practices.
The Commission urged operators in the industry to uphold the principles of transparency, fairness and healthy competition in their pricing decisions.
It also assured consumers that it would continue monitoring developments in the market and would take appropriate action against any business found to be engaging in exploitative or anti-competitive conduct.
With fuel prices remaining one of the biggest concerns for millions of Nigerians, many consumers will be hoping that the recent decline in global crude oil prices will soon be reflected in lower prices at filling stations across the country.