The Federal Competition and Consumer Protection Commission (FCCPC) has warned local refiners, marketers, depot operators, and retail outlet operators of possible enforcement action over what it described as unfair and exploitative fuel pricing practices in Nigeria.
In a statement issued by the FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu, on Sunday, the Commission expressed concern over findings from an ongoing surveillance of the downstream petroleum market, suggesting the undue exploitation of consumers.
FCCPC stated that a review of the gantry prices of local refiners, marketers, depot operators, and retail outlet operators revealed only token reductions that are not commensurate with the steep fall in crude oil prices in the global market.
Reacting to the development, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, Mr. Tunji Bello, explained that 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 expressed concern that while dealers often respond swiftly by increasing pump prices whenever crude oil prices rise, consumers take much longer to benefit when crude oil prices fall.
The FCCPC boss emphasised that competitive markets must work fairly in both directions, noting that 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 added.
He further urged consumers to continue reporting suspected anti-competitive conduct, misleading pricing practices, and other forms of unfair market behaviour through the Commission’s established complaint channels.
The Commission pointed out that following a ceasefire agreement between the United States and Iran two weeks ago and the reopening of the Strait of Hormuz, crude oil prices have fallen to $73 per barrel, a sharp drop from the peak of $120 per barrel recorded in April.
FCCPC also noted that crude oil prices have since returned to February levels across the global market.
“The earlier spike in crude prices saw local refiners and marketers raising pump prices swiftly across the country, with petrol price climbing to between ₦1,350 to ₦1,500 and diesel selling for about₦2,000 as hostilities intensified in the Gulf between April and May.
“In February, PMS (petrol) averaged between ₦800 and ₦900. Across the country today, PMS is still sold at an average of ₦1,200, while some local refiners fixed between ₦1,025 and ₦1,075 as their gantry prices,” it stated.
While acknowledging that domestic fuel prices are influenced by a range of commercial and market factors, including refining costs, foreign exchange movements, logistics, financing, and distribution expenses, the Commission said that it expects competitive market dynamics to facilitate the swift transmission of cost savings to consumers.
