FCCPC questions slow drop in petrol prices despite cheaper crude

By Ezurike Ugochukwu

The Federal Competition and Consumer Protection Commission (FCCPC) has cautioned petroleum marketers against exploiting consumers, warning that the current retail price of Premium Motor Spirit (PMS), popularly known as petrol, does not reflect the sharp decline in global crude oil prices.

In a statement issued on Sunday, the Commission said its ongoing surveillance of the downstream petroleum sector indicates that consumers are not benefiting from recent reductions in crude oil prices, despite marketers responding swiftly with price increases whenever international oil prices rise.

According to the FCCPC, its review of gantry prices charged by local refiners, depot operators, marketers and retail outlets revealed only marginal reductions that are inconsistent with the significant drop in crude oil prices on the international market.

The Commission noted that crude oil prices have fallen to about $73 per barrel following the ceasefire between the United States and Iran and the reopening of the Strait of Hormuz, compared to a peak of $120 per barrel recorded during heightened tensions in April. It added that global crude prices have effectively returned to February levels.

The agency recalled that during the spike in crude oil prices, petrol pump prices rose rapidly across Nigeria, reaching between ₦1,350 and ₦1,500 per litre, while diesel sold for as much as ₦2,000 per litre. By contrast, petrol sold for between ₦800 and ₦900 per litre in February before the price surge.

Despite the recent decline in crude prices, the Commission observed that petrol is still sold at an average of ₦1,200 per litre nationwide, while some local refiners currently offer ex-depot prices ranging from ₦1,025 to ₦1,075 per litre.

Although acknowledging that domestic fuel prices are influenced by factors such as refining costs, foreign exchange fluctuations, logistics, financing and distribution expenses, the FCCPC maintained that competitive market forces should have translated into more meaningful price reductions for consumers.

Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, stressed that while the Commission does not regulate fuel prices in Nigeria’s deregulated downstream petroleum sector, it has a statutory responsibility under the Federal Competition and Consumer Protection Act, 2018, to prevent anti-competitive conduct and protect consumers from exploitative business practices.

“Dealers often respond almost immediately by increasing pump prices whenever crude oil prices rise. It is therefore troubling that consumers are yet to enjoy corresponding relief now that crude prices have declined significantly. A competitive market should work fairly in both directions,” Bello said.

He warned that market liberalisation does not exempt businesses from the obligation to compete fairly or shield them from regulatory scrutiny where there is evidence of consumer exploitation.

According to him, the Commission will investigate and sanction any company found engaging in anti-competitive conduct, unfair pricing or other practices that violate the provisions of the FCCPC Act.

Bello also urged members of the public to continue reporting suspected price manipulation, anti-competitive behaviour and other unfair market practices through the Commission’s established complaint channels.

The warning comes days after the Dangote Refinery reduced its ex-depot petrol price from ₦1,175 to ₦1,125 per litre, while Brent crude, the international oil benchmark, fell to $72.97 per barrel on June 26, its lowest level since February.

The FCCPC said it would continue monitoring developments in the downstream petroleum sector to ensure consumers receive the full benefits of competitive market pricing.