FCCPC Warns Petrol Marketers Over Slow Price Cuts Despite Drop in Global Crude Oil Prices

The Federal Competition and Consumer Protection Commission (FCCPC) has expressed concern over what it described as the slow reduction in petrol prices by refiners, depot owners, marketers and retailers despite the significant decline in global crude oil prices.

The Commission warned that operators found exploiting consumers through unfair pricing practices could face regulatory sanctions.

In a statement issued on Sunday by its Director of Corporate Affairs, Ondaje Ijagwu, the FCCPC said its ongoing surveillance of the downstream petroleum sector indicates that recent reductions in ex-depot and pump prices do not reflect the sharp fall in international crude oil prices.

Consumers Deserve the Benefits of Falling Crude Prices

Commenting on the development, Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said although the Commission does not regulate fuel prices in Nigeria’s deregulated downstream market, it has a statutory responsibility to promote fair competition and protect consumers from exploitative business practices.

“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 said.

He noted that marketers often increase pump prices almost immediately whenever global crude oil prices rise but appear reluctant to reduce prices at the same pace when international oil prices decline.

“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,” he added.

Crude Oil Falls But Pump Prices Remain High

According to the FCCPC, global crude oil prices have declined significantly following the ceasefire between the United States and Iran and the reopening of the Strait of Hormuz after heightened geopolitical tensions in the Middle East.

The Commission noted that crude oil, which climbed to about 120 dollars per barrel during the peak of the crisis, has fallen to approximately 73 dollars per barrel, returning to levels last seen earlier in the year.

During the period of rising crude prices, petrol sold for between ₦1,350 and ₦1,500 per litre, while diesel reached as high as ₦2,000 per litre in parts of the country.

Although some local refiners have reduced their ex-depot prices to between ₦1,025 and ₦1,075 per litre, the Commission observed that petrol continues to retail at an average of about ₦1,200 per litre, well above the ₦800 to ₦900 per litre price range recorded before the spike in global oil prices.

FCCPC Threatens Enforcement

While acknowledging that domestic fuel pricing is influenced by factors such as foreign exchange rates, refining costs, transportation, financing and distribution expenses, the FCCPC maintained that a competitive market should enable consumers to benefit more quickly from declining costs.

Bello warned that deregulation does not exempt businesses from complying with competition and consumer protection laws.

“Market liberalisation does not diminish businesses’ obligations to compete fairly or consumers’ right to fair treatment.

“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 said.

The Commission also urged Nigerians to report suspected cases of anti-competitive conduct, price manipulation, misleading pricing and other unfair market practices through its established complaint channels.

Consumers Expect Further Price Reductions

The FCCPC’s warning comes amid growing public expectations that petrol prices will continue to decline following the sustained drop in international crude oil prices.

Industry observers note that while fuel prices increased rapidly during the recent Middle East crisis, the expected downward adjustment has been slower despite improved conditions in the global oil market.

Many Nigerians are hoping that increased competition among refiners and marketers will drive pump prices closer to the levels recorded before the global oil price surge, easing transportation costs and overall inflationary pressures.