The Federal Competition and Consumer Protection Commission (FCCPC) has expressed concern over what it described as possible consumer exploitation in Nigeria’s downstream petroleum sector, following the failure of fuel prices to decline significantly despite a sharp drop in global crude oil prices.
The commission said its ongoing market surveillance showed that local refiners, depot operators, marketers, and filling station owners had implemented only marginal reductions in fuel prices, despite the steep decline in international crude oil prices.
In a statement issued on Sunday by the FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu, the commission said a review of prevailing gantry and retail prices indicated that consumers were yet to fully benefit from the easing in global oil prices.
According to the statement, the commission’s findings suggest possible undue exploitation of consumers in the downstream petroleum market.
It noted that while gantry prices had recorded slight reductions, the changes were not proportional to the sharp fall in crude oil prices in the international market.
The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said the commission was concerned by what appeared to be a one-sided response by operators to fluctuations in global crude oil prices.
Bello observed that marketers often increase pump prices immediately whenever crude oil prices rise but are reluctant to reduce prices when global oil prices fall.
He clarified that the FCCPC does not regulate or approve petroleum prices in Nigeria’s deregulated downstream market.
According to him, the commission’s responsibility under the Federal Competition and Consumer Protection Act, 2018, is to promote competitive markets, prevent anti-competitive practices, and protect consumers from unfair, deceptive, and exploitative business conduct.
Bello stressed that competitive markets should operate fairly in both directions, ensuring consumers benefit when market conditions improve.
The commission’s concerns come amid a sharp decline in global crude oil prices 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 due to fears of supply disruptions linked to tensions in the Middle East, have since dropped to around $73 per barrel.
The earlier increase in crude prices led to immediate hikes in local fuel prices, with petrol selling for between N1,350 and N1,500 per litre in many parts of Nigeria, while diesel climbed to about N2,000 per litre.
Despite the decline in international oil prices, the FCCPC noted that petrol is still selling for an average of about N1,200 per litre nationwide, while some local refiners currently offer gantry prices ranging between N1,025 and N1,075 per litre.
Although the commission acknowledged that domestic fuel prices are influenced by several factors, including exchange rate movements, logistics costs, financing expenses, refining costs, and distribution charges, it maintained that market competition should ordinarily have resulted in more significant reductions in pump prices.
Bello warned that market liberalisation does not remove the obligation of businesses to compete fairly or the right of consumers to receive fair treatment.
He said the commission would investigate and take appropriate enforcement action wherever credible evidence shows anti-competitive conduct, consumer exploitation, or violations of the Federal Competition and Consumer Protection Act.
The FCCPC also urged Nigerians to report suspected cases of price manipulation, anti-competitive practices, and other unfair market conduct through its official complaint channels.
The commission’s warning is expected to reignite debate over the effectiveness of Nigeria’s deregulated petroleum market, as consumers and industry stakeholders continue to question why falling global crude oil prices have not translated into proportionate reductions in fuel prices.
Since the removal of fuel subsidy and the deregulation of the downstream petroleum sector, fuel prices have become increasingly linked to movements in global crude oil prices and foreign exchange rates.
However, consumer groups have repeatedly accused marketers of implementing price increases almost immediately while delaying price reductions whenever market conditions improve.
The FCCPC said it would continue monitoring pricing practices in the sector to ensure consumers benefit fairly from favourable market developments.
