Amid Drop in Global Crude Oil Price, FCCPC Warns Marketers Against Exploiting Consumers

Nigeria's Federal Competition and Consumer Protection Commission (FCCPC) has issued a stern warning to operators in the downstream petroleum sector, cautioning them against exploiting consumers by not reflecting the sharp decline in global crude oil prices in retail fuel costs. Executive Vice Chairman/Chief Executive of FCCPC, Mr. Tunji Bello, stated that ongoing surveillance revealed marginal reductions in gantry prices by refiners, marketers, and retailers, which are far below what current global crude oil prices should justify.

While acknowledging that the FCCPC does not regulate or approve petroleum prices in Nigeria's deregulated downstream market, Bello stressed the commission's mandate under the Federal Competition and Consumer Protection Act (FCCPA), 2018. This mandate includes promoting competitive markets, preventing anti-competitive conduct, and protecting consumers from unfair, deceptive, and exploitative business practices. The commission stated it would not hesitate to investigate and sanction operators found in violation of the law.

“

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 expressed concern over the disparity in price adjustments, noting that dealers often swiftly increase pump prices when crude oil prices rise, but are slow to pass on benefits when prices fall. "Competitive markets must work fairly in both directions," he asserted. International crude prices have reportedly dropped to around $73 per barrel from a peak of $120 per barrel in April, largely due to a ceasefire agreement and the reopening of the Strait of Hormuz. These prices have returned to February levels.

Despite this global price reversal, the FCCPC observed that petrol is currently selling at an average of about N1,200 per litre nationwide. Some local refiners have fixed gantry prices between N1,025 and N1,075 per litre. This contrasts with the earlier surge when petrol prices ranged between N1,350 and N1,500 per litre, and diesel reached about N2,000 per litre during periods of heightened geopolitical tension in April and May. In February, petrol prices were between N800 and N900 per litre. The commission acknowledged that domestic fuel prices are influenced by various commercial variables but insisted that the current pump prices do not adequately reflect the significant drop in global crude oil costs.

“

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.