The Federal Competition and Consumer Protection Commission (FCCPC) on Sunday, June 28, warned operators in the downstream petroleum sector against exploiting consumers following their refusal to reduce petrol pump price to reflect the sharp decline in global crude oil prices.
In a statement released, the Executive Vice Chairman/Chief Executive of the Commission, Tunji Bello, said the ongoing surveillance of the downstream petroleum market by the commission had revealed that reductions in gantry prices by local refiners, marketers, depot operators, and retail outlet operators had been marginal and far below current global crude oil prices.
Bello stressed that although the commission does not regulate or approve petroleum prices in the country’s deregulated downstream market, it would not hesitate to investigate and sanction operators found to be engaging in anti-competitive, deceptive, or exploitative practices in violation of the Federal Competition and Consumer Protection Act (FCCPA), 2018.
“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.”
According to the FCCPC boss, international crude prices have dropped sharply to about $73 per barrel following the ceasefire agreement between the United States and Iran and the reopening of the Strait of Hormuz, compared with a peak of about $120 per barrel recorded in April at the height of tensions in the Gulf.
The commission noted that crude prices had effectively returned to their February levels, yet the decline had not been matched by a commensurate reduction in domestic fuel prices.
Crude oil prices have declined since the easing of tensions in the Middle East, including the ceasefire between Israel and Iran and the reopening of the Strait of Hormuz.
The earlier spike pushed local petrol prices to between N1,350 and N1,500 per litre, while diesel rose to about N2,000 per litre during the height of the war. However, despite the ceasefire agreements and easing of tensions, petrol still sells for about N1,200 per litre in many parts of Nigeria.
It is expected that the pump price of petrol falls below N1,000 per litre.