FCCPC questions slow fuel price cuts amid crude oil crash

Nigeria's Federal Competition and Consumer Protection Commission (FCCPC) is scrutinizing the downstream petroleum sector, questioning the slow reduction in fuel prices despite a sharp decline in global crude oil costs. The commission's market surveillance indicates that local refiners, depot operators, marketers, and filling station owners have implemented only minor price cuts, which are not proportionate to the steep fall 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, the FCCPC highlighted that a review of prevailing gantry and retail prices suggests consumers have not fully benefited from the easing global oil prices. The commission expressed concern over what appears to be a "one-sided response" to market fluctuations. Operators tend to raise pump prices quickly when crude oil costs increase but are slow to pass on savings to consumers when prices decrease.

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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.

FCCPC Executive Vice Chairman Tunji Bello clarified that the commission does not regulate petroleum prices in the deregulated market. However, under the Federal Competition and Consumer Protection Act, 2018, its mandate is to foster competitive markets, prevent anti-competitive conduct, and shield consumers from unfair or deceptive business practices. Bello emphasized that competitive markets must function equitably in both directions, reacting swiftly to price increases and decreases alike.

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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.