Federal Competition and Consumer Protection Commission (FCCPC) has expressed concern over findings from its ongoing surveillance of the downstream petroleum market, which suggest that consumers are being exploited despite the significant decline in global crude oil prices.
In a statement issued on Sunday by the Director, Corporate Affairs, Ondaje Ijagwu, the Commission said its review of the gantry prices of local refiners, marketers, depot operators and retail outlet operators revealed only marginal reductions that are not commensurate with the sharp drop in crude oil prices on the international market.
Reacting to the development, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, Mr. Tunji Bello, said:
> “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.
“We are concerned that while dealers often respond swiftly by hiking pump prices whenever crude oil prices rise, it is curious that it is taking so long for consumers to benefit significantly when crude prices fall. Competitive markets must work fairly in both directions.”
According to the Commission, following a ceasefire between the United States and Iran two weeks ago and the reopening of the Strait of Hormuz, global crude oil prices fell sharply to about $73 per barrel, down from a peak of $120 per barrel in April. Prices have since returned to February levels.
The earlier spike in crude oil prices had prompted local refiners and marketers to raise pump prices across the country, with petrol selling for between ₦1,350 and ₦1,500 per litre, while diesel rose to about ₦2,000 per litre as hostilities in the Gulf escalated between April and May.
In February, Premium Motor Spirit (PMS), popularly known as petrol, sold for between ₦800 and ₦900 per litre. However, despite the decline in crude prices, PMS is still sold at an average of about ₦1,200 per litre nationwide, while some local refiners have fixed gantry prices at between ₦1,025 and ₦1,075 per litre.
While acknowledging that domestic fuel prices are influenced by several commercial and market factors—including refining costs, foreign exchange fluctuations, logistics, financing and distribution expenses—the FCCPC said competitive market forces should have ensured that cost savings were passed on to consumers more quickly.
Mr. Bello added: “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.”
He urged consumers to continue reporting suspected anti-competitive practices, misleading pricing and other forms of unfair market conduct through the Commission’s established complaint channels.