Consumers Deserve Relief as Oil Prices Fall – FCCPC

The Federal Competition and Consumer Protection Commission (FCCPC) has expressed concern over findings from its ongoing surveillance of the downstream petroleum sector, indicating possible exploitation of consumers.

In a statement issued by the Director of Corporate Affairs, Mr. Ondaje Ijagwu, the Commission said its review of gantry prices among local refiners, marketers, depot operators and retail outlets revealed only marginal reductions, despite the sharp decline in crude oil prices on the global market.
According to the FCCPC, “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.
“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.”
Following a ceasefire agreement between the United States and Iran two weeks ago and the reopening of the Strait of Hormuz, global crude oil prices have fallen to about $73 per barrel, down significantly from the peak of $120 recorded in April.
The Commission noted that crude prices have now returned to February levels across the global market.
During the earlier surge in crude prices, local refiners and marketers quickly increased pump prices nationwide, with petrol selling between N1,350 and N1,500 per litre, while diesel rose to about N2,000 per litre as tensions escalated in the Gulf between April and May.
In February, the average pump price of Premium Motor Spirit (PMS) ranged between N800 and N900 per litre.
Currently, PMS still sells at an average of N1,200 nationwide, while some local refiners have fixed gantry prices between N1,025 and N1,075.
Although the Commission acknowledged that domestic fuel prices are influenced by several commercial and market factors, including refining costs, foreign exchange rates, logistics, financing and distribution expenses, it maintained that competitive market forces should have enabled consumers to benefit more quickly from lower costs.
Mr. Bello further stated: “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 also encouraged consumers to continue reporting suspected anti-competitive practices, misleading pricing and other unfair market behaviour through the Commission’s established complaint channels.