FCCPC probes exploitative fuel pricing despite falling oil costs

Nigeria's Federal Competition and Consumer Protection Commission (FCCPC) has launched an investigation into the downstream petroleum sector, citing concerns over possible consumer exploitation. The commission observed that fuel prices have seen only marginal reductions, which are not commensurate with the significant drop in international crude oil prices.

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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.

In a statement released on Sunday, the FCCPC highlighted findings from its ongoing market surveillance. A review of prices from local refiners, depot operators, and filling stations indicated that consumers have not fully benefited from the easing global oil prices. The commission stated that the reductions observed were "token" and did not reflect the steep fall in crude oil costs.

FCCPC Executive Vice Chairman Tunji Bello expressed concern over the industry's response to price fluctuations. He noted that operators in the downstream sector are quick to raise pump prices when crude oil costs increase but are slow to pass on benefits to consumers when prices fall. Bello clarified that while the FCCPC does not regulate petroleum prices in a deregulated market, its mandate is to ensure competitive markets and protect consumers from unfair practices.

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A review of the gantry prices of local refiners, marketers, depot operators, and retail outlet operators revealed token reductions in prices that are not commensurate with the steep fall in crude prices in the global market.

"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," Bello said. He stressed that competitive markets must function fairly in both directions. The FCCPC's concerns arise amid a sharp reversal in global oil prices, influenced by factors such as a ceasefire agreement between the U.S. and Iran and the reopening of the Strait of Hormuz.

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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.