Federal Competition and Consumer Protection Commission has expressed concern over the slow reduction in petrol prices despite a sharp decline in global crude oil prices, saying that consumers may be facing exploitation in Nigeria’s downstream petroleum sector.
According to gnd commission , 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 significant drop in international crude oil prices.
This was contained in a statement made available to Newsmen on Sunday by the FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu in Abuja.
He said the commission’s review of prevailing gantry and retail prices indicated that consumers were yet to fully benefit from the easing in global oil prices.
“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.
It added that a review of gantry prices by local refiners, marketers, depot operators and retail outlets revealed only token reductions that were not proportional to the steep fall in global crude oil prices.
The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said operators in the downstream sector often raise pump prices quickly whenever crude oil prices increase but are slow to reduce prices when crude prices fall.
He stressed that although the commission does not regulate petroleum prices in the deregulated market, it has the responsibility under the Federal Competition and Consumer Protection Act, 2018, to promote fair competition and protect consumers from exploitative business practices.
“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,” Bello said.
The FCCPC’s concerns come as global crude oil prices have dropped sharply following a ceasefire agreement between the United States and Iran and the reopening of the Strait of Hormuz, a key global oil shipping route.
Crude oil prices, which had risen to about $120 per barrel in April during the Middle East crisis, have since fallen to around $73 per barrel.
The earlier spike in crude prices pushed petrol prices in Nigeria to between N1,350 and N1,500 per litre in many parts of the country, while diesel sold for about N2,000 per litre. In February, petrol sold for between N800 and N900 per litre.
Despite the fall in crude oil prices, the commission noted that petrol is still selling for an average of about N1,200 per litre nationwide, while some local refiners have gantry prices ranging from N1,025 to N1,075 per litre.
The FCCPC acknowledged that domestic fuel prices are influenced by factors such as foreign exchange rates, logistics, financing, refining and distribution costs.
It maintained that competitive market forces should have resulted in more substantial reductions in pump prices.
Bello warned that where there is credible evidence of anti-competitive conduct, consumer exploitation or violations of the Federal Competition and Consumer Protection Act, the commission would investigate and take appropriate enforcement action.
He also urged Nigerians to report suspected cases of price manipulation, anti-competitive behaviour and other unfair market practices through the commission’s complaint channels.
The commission said its warning could trigger closer regulatory scrutiny of pricing practices as pressure mounts on operators to ensure that the benefits of lower global crude oil prices are passed on to consumers.
