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 reflect the sharp decline in global crude oil prices.
According to the commission, ongoing market surveillance indicates that local refiners, depot operators, marketers and filling station owners have implemented only marginal reductions in petrol prices despite the significant drop in international crude oil prices.
In a statement issued on Sunday by the FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu, the commission said its review of prevailing gantry and retail prices showed that consumers were yet to fully benefit from the easing of global oil prices.
The statement noted that findings from its surveillance of the downstream petroleum market pointed to possible undue exploitation of consumers, adding that price reductions by operators across the supply chain were merely token adjustments that did not reflect the extent of the fall in crude oil prices.
The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said the commission was concerned about what appeared to be a one-sided response by operators to fluctuations in crude oil prices.
Bello observed that marketers often increase pump prices almost immediately whenever global crude prices rise but are slow to reduce prices when international oil prices decline.
He stressed that the FCCPC does not regulate or approve petroleum prices in Nigeria’s deregulated downstream market. Rather, its mandate under the Federal Competition and Consumer Protection Act, 2018, is to promote fair competition, prevent anti-competitive practices and protect consumers from unfair, deceptive and exploitative business conduct.
“We are concerned that while dealers often respond swiftly by hiking pump prices whenever crude prices rise, it is taking far longer for consumers to benefit when crude prices fall. Competitive markets must work fairly in both directions,” Bello said.
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.
