The Federal Competition and Consumer Protection Commission (FCCPC) has warned petroleum marketers against maintaining high petrol prices despite the recent decline in global crude oil prices, saying Nigerian consumers should benefit from lower fuel costs.
The Commission said ongoing surveillance of the downstream petroleum sector revealed indications of possible consumer exploitation, as reductions in petrol prices by refiners, depot operators and marketers have remained marginal despite a significant drop in international crude oil prices, The News Edition reports.
FCCPC Raises Concern Over Fuel Pricing
In a statement issued on Sunday, the FCCPC noted that global crude oil prices have fallen sharply to about $73 per barrel following the easing of tensions between the United States and Iran and the reopening of the Strait of Hormuz.
The agency recalled that crude prices had climbed to nearly $120 per barrel during heightened geopolitical tensions in the Middle East between April and May, prompting a swift increase in petrol prices across Nigeria.
However, despite crude oil prices returning to levels recorded earlier in the year, retail fuel prices have remained considerably higher.
Consumers Yet to Feel the Impact of Falling Crude Prices
According to the Commission, petrol sold for between ₦800 and ₦900 per litre in February before surging to between ₦1,350 and ₦1,500 per litre at the peak of the crisis.
Although crude oil prices have since declined significantly, many filling stations continue to sell petrol at an average price of about ₦1,200 per litre.
The FCCPC also noted that some domestic refiners currently offer petrol at ex-depot prices ranging from ₦1,025 to ₦1,075 per litre, raising questions about the pace at which lower costs are being passed on to consumers.
Deregulation Does Not Permit Consumer Exploitation
The Executive Vice Chairman and Chief Executive Officer of the FCCPC, , stressed that although the Commission does not regulate fuel prices under Nigeria’s deregulated petroleum market, it is legally empowered to prevent unfair market practices and protect consumers.
“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 adjust prices upward immediately when crude oil prices rise but are slow to reduce prices when market conditions improve.
“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.
Marketers Face Possible Investigation and Sanctions
The FCCPC warned that market deregulation does not exempt businesses from complying with competition laws and consumer protection regulations.
According to Bello, the Commission is prepared to investigate any company suspected of engaging in anti-competitive conduct, price manipulation or practices that exploit consumers.
He noted that businesses found violating provisions of the Federal Competition and Consumer Protection Act could face regulatory sanctions.
“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 stated.
Consumers Encouraged to Report Unfair Practices
The Commission urged Nigerians to report suspected cases of price fixing, market manipulation and other unfair business practices through its official complaint channels.
The warning comes days after announced a reduction in its ex-depot petrol price from ₦1,175 per litre to ₦1,125 per litre, citing the continued decline in global crude oil prices.
Meanwhile, Brent crude, the international benchmark for oil prices, recently fell to about $72.97 per barrel, its lowest level since February, strengthening calls for further reductions in retail petrol prices across Nigeria.