The Federal Competition and Consumer Protection Commission, FCCPC, has raised concerns over what it described as possible consumer exploitation in the downstream petroleum sector.
This follows findings that reductions in fuel prices have not reflected the sharp decline in global crude oil prices.
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The Commission, in a statement signed by its Director Corporate Affairs, Ondaje Ijagwu, said its ongoing surveillance of the downstream market showed that price reductions by refiners, marketers, depot operators, and retailers remain minimal despite significant drops in international crude prices.
Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, stressed that although the Commission does not regulate fuel prices in a deregulated market, it remains responsible for ensuring fair competition and consumer protection.
“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 stated.
He expressed concern that marketers have historically increased pump prices quickly when crude oil prices rise but have been slow to pass on the benefits of falling prices to consumers.
“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.”
According to the Commission, crude oil prices have fallen sharply from a peak of 120 dollars per barrel recorded in April to about 73 dollars per barrel following a ceasefire agreement between the United States and Iran and the reopening of the Strait of Hormuz.
The FCCPC noted that global crude prices have since returned to February levels, yet domestic pump prices remain relatively high.
It recalled that during the period of heightened tensions in the Gulf region between April and May, petrol prices in Nigeria surged between N1,350 and N1,500 per litre, while diesel sold for about N2,000 per litre.
In February, Premium Motor Spirit averaged between N800 and N900 per litre, whereas current retail prices hover around N1,200 per litre, with some local refiners fixing gantry prices between N1,025 and N1,075.
While acknowledging that domestic fuel prices are influenced by several factors, including refining costs, exchange rates, logistics, financing, and distribution expenses, the Commission maintained that competitive market forces should enable consumers to benefit from reduced costs.
“Market liberalisation does not diminish businesses’ obligations to compete fairly or consumers’ right to fair treatment.Â
“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 added.
The FCCPC urged Nigerians to continue reporting suspected anti-competitive practices, misleading pricing, and other forms of unfair market behaviour through its established complaint channels.
