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The Federal Competition and Consumer Protection Commission (FCCPC) has raised concerns over what it described as the continued exploitation of Nigerian consumers by operators in the downstream petroleum sector, warning that businesses found engaging in unfair pricing practices could face sanctions.
The Commission said in a statement on Sunday that findings from its ongoing surveillance of the downstream petroleum market indicate that recent reductions in the gantry prices of local refiners, depot operators, marketers and retail outlet operators remain insignificant despite the sharp decline in global crude oil prices.
Speaking on the development, the 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 the statutory responsibility to ensure fair competition and protect consumers from exploitative business practices.
"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," Bello said.
He expressed concern that marketers have consistently responded quickly by increasing pump prices whenever international crude oil prices rise but have failed to reduce prices at the same pace when global crude prices decline.
"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," he stated.
The Commission noted that following the ceasefire agreement between the United States and Iran and the reopening of the Strait of Hormuz about two weeks ago, international crude oil prices declined significantly to about 73 dollars per barrel, down from a peak of approximately 120 dollars per barrel recorded in April.
According to the FCCPC, crude prices have now returned to levels recorded in February. However, the corresponding reduction in domestic fuel prices has remained minimal.
It recalled that during the spike in crude prices between April and May, local refiners and marketers rapidly increased pump prices, with Premium Motor Spirit (PMS), popularly known as petrol, selling between ₦1,350 and ₦1,500 per litre, while diesel rose to around ₦2,000 per litre.
Although petrol sold for between ₦800 and ₦900 per litre in February, the Commission observed that the product is currently retailing at an average of about ₦1,200 per litre, despite some refiners reducing their gantry prices to between ₦1,025 and ₦1,075 per litre.
While acknowledging that domestic fuel prices are influenced by several factors, including refining costs, foreign exchange fluctuations, logistics, financing and distribution expenses, the Commission maintained that market competition should ordinarily ensure that lower operating costs are reflected in prices paid by consumers.
Bello warned that deregulation does not exempt businesses from complying with competition and consumer protection laws.
"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 said.
The FCCPC also urged Nigerians to continue reporting suspected anti-competitive practices, misleading pricing and other forms of unfair market conduct through its established complaint channels, assuring consumers that all credible reports would be investigated.