FCCPC Warns Oil Marketers Over Slow Petrol Price Cuts, Threatens Sanctions

The Federal Competition and Consumer Protection Commission (FCCPC) has warned operators in Nigeria's downstream petroleum sector against delaying reductions in petrol prices despite the recent decline in global crude oil prices, saying businesses found engaging in exploitative or anti-competitive practices will face regulatory sanctions.

In a statement issued on Sunday, the Commission expressed concern that many marketers, depot owners and retail outlets have been slow to pass on the benefits of falling international crude oil prices to consumers, even as local refiners have begun reducing their ex-depot prices.

According to the FCCPC, its ongoing surveillance of the downstream petroleum market indicates that reductions in both gantry and retail prices have remained marginal despite a significant drop in crude oil prices following the ceasefire between the United States and Iran and the reopening of the Strait of Hormuz.

The Commission noted that international crude oil prices have declined to about 73 dollars per barrel, down from a peak of 120 dollars per barrel recorded in April, effectively returning to price levels seen in February.

It recalled that petrol sold for between ₦800 and ₦900 per litre in February before rising sharply to between ₦1,350 and ₦1,500 per litre during the spike in global crude prices between April and May.

Although some local refiners have since reduced their gantry prices to between ₦1,025 and ₦1,075 per litre, the FCCPC observed that the average retail pump price across the country still hovers around ₦1,200 per litre, leaving consumers with only limited relief.

The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, stressed that while the Commission does not regulate or fix petroleum prices in Nigeria's deregulated downstream market, it is empowered under the Federal Competition and Consumer Protection Act, 2018 to promote fair competition and protect consumers from exploitative market practices.

"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," Bello said.

The Commission acknowledged that petrol pricing is influenced by several variables, including foreign exchange fluctuations, refining costs, transportation, logistics, financing and distribution expenses.

However, it maintained that in a properly functioning competitive market, declining operational costs should be reflected more promptly in retail fuel prices.

Bello warned that deregulation does not grant businesses the freedom to engage in unfair or exploitative pricing practices.

He said the FCCPC would investigate any credible evidence of anti-competitive conduct, consumer exploitation or other violations of the Federal Competition and Consumer Protection Act, adding that appropriate enforcement measures would be taken where necessary.

The Commission also urged Nigerians to continue reporting suspected cases of price manipulation, misleading pricing practices and other anti-competitive behaviour through its official complaint channels as it intensifies oversight of the downstream petroleum sector.

The FCCPC reaffirmed that while market liberalisation encourages competition, it must also guarantee fairness, transparency and consumer protection, insisting that the benefits of lower crude oil prices should ultimately be reflected at filling stations across the country.

The Federal Competition and Consumer Protection Commission (FCCPC) has warned operators in Nigeria's downstream petroleum sector against delaying reductions in petrol prices despite the recent decline in global crude oil prices, saying businesses found engaging in exploitative or anti-competitive practices will face regulatory sanctions.

In a statement issued on Sunday, the Commission expressed concern that many marketers, depot owners and retail outlets have been slow to pass on the benefits of falling international crude oil prices to consumers, even as local refiners have begun reducing their ex-depot prices.

According to the FCCPC, its ongoing surveillance of the downstream petroleum market indicates that reductions in both gantry and retail prices have remained marginal despite a significant drop in crude oil prices following the ceasefire between the United States and Iran and the reopening of the Strait of Hormuz.

The Commission noted that international crude oil prices have declined to about 73 dollars per barrel, down from a peak of 120 dollars per barrel recorded in April, effectively returning to price levels seen in February.

It recalled that petrol sold for between ₦800 and ₦900 per litre in February before rising sharply to between ₦1,350 and ₦1,500 per litre during the spike in global crude prices between April and May.

Although some local refiners have since reduced their gantry prices to between ₦1,025 and ₦1,075 per litre, the FCCPC observed that the average retail pump price across the country still hovers around ₦1,200 per litre, leaving consumers with only limited relief.

The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, stressed that while the Commission does not regulate or fix petroleum prices in Nigeria's deregulated downstream market, it is empowered under the Federal Competition and Consumer Protection Act, 2018 to promote fair competition and protect consumers from exploitative market practices.

"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," Bello said.

The Commission acknowledged that petrol pricing is influenced by several variables, including foreign exchange fluctuations, refining costs, transportation, logistics, financing and distribution expenses.

However, it maintained that in a properly functioning competitive market, declining operational costs should be reflected more promptly in retail fuel prices.

Bello warned that deregulation does not grant businesses the freedom to engage in unfair or exploitative pricing practices.

He said the FCCPC would investigate any credible evidence of anti-competitive conduct, consumer exploitation or other violations of the Federal Competition and Consumer Protection Act, adding that appropriate enforcement measures would be taken where necessary.

The Commission also urged Nigerians to continue reporting suspected cases of price manipulation, misleading pricing practices and other anti-competitive behaviour through its official complaint channels as it intensifies oversight of the downstream petroleum sector.

The FCCPC reaffirmed that while market liberalisation encourages competition, it must also guarantee fairness, transparency and consumer protection, insisting that the benefits of lower crude oil prices should ultimately be reflected at filling stations across the country.