FCCPC warns marketers over petrol price cuts and possible sanctions

The Federal Competition and Consumer Protection Commission (FCCPC) is worried that consumers are not getting the full benefits from the recent drop in global crude oil prices. The commission says it will punish any businesses taking advantage of buyers in the petroleum sector.

The commission's ongoing checks in the downstream petroleum market show that local refiners, marketers, depot operators, and retail outlets have not lowered their prices as much as the sharp fall in global crude oil prices would suggest.

Tunji Bello, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, shared this information in a statement on Sunday. Mr Bello explained that while the commission does not control or approve petrol prices in Nigeria’s free market, it is required by the Federal Competition and Consumer Protection Act (FCCPA) 2018 to promote competition and protect consumers from unfair and deceptive business practices.

“To be clear, the commission does not regulate or approve petroleum prices in a deregulated downstream market,” he said. “Our job 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.”

Mr Bello pointed out that the commission is troubled by how marketers quickly raise pump prices when crude oil prices go up, but it takes a long time for consumers to see price drops when crude prices decrease. “We are concerned that while dealers often respond swiftly by hiking pump prices whenever crude prices rise, it is curious that it takes so long for consumers to benefit significantly when crude prices fall. Competitive markets must work fairly in both directions,” Mr Bello added.

The commission reported that crude oil prices have dropped to about $73 per barrel. This follows a ceasefire between the United States and Iran and the reopening of the Strait of Hormuz. This is down from a peak of $120 per barrel in April. Global crude prices have returned to levels seen in February.

The FCCPC noted that the earlier rise in crude prices led local refiners and marketers to increase petrol prices nationwide to between ₦1,350 and ₦1,500 per litre. Diesel also rose to around ₦2,000 per litre during the conflict between April and May.

In February, petrol sold for between ₦800 and ₦900 per litre. Now, it averages about ₦1,200 per litre across the country, although some local refiners have brought their ex-depot prices down to between ₦1,025 and ₦1,075 per litre.

The commission acknowledged that domestic fuel prices are affected by factors such as refining costs, foreign exchange rates, logistics, financing, and distribution costs. Still, they believe that market competition should allow consumers to benefit faster from lower global crude prices.

Mr Bello warned that just because the market is free does not mean businesses can ignore fair competition or that consumers should not expect 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 stated.

He encouraged consumers to keep reporting any signs of unfair market behavior, such as misleading prices, through the commission’s complaint channels.