NIGERIA: FCCPC Warns Oil Marketers Against Profiteering Amid Global Crude Price Drop

By Ameenat Hamzat, Lagos, Nigeria

The Federal Competition and Consumer Protection Commission (FCCPC) has raised concerns over what it describes as the exploitation of consumers by oil marketers, warning that it will sanction businesses found engaging in unfair pricing practices despite the sharp decline in global crude oil prices.

The Commission, in a statement signed by its Director of Corporate Affairs, Ondaje Ijagwu, said its market surveillance showed that reductions in gantry and pump prices by local refiners, marketers, depot operators and retail outlets were not commensurate with the significant fall in global crude oil prices.

Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said, “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.”

According to the Commission, crude oil prices have dropped to about 73 dollars 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 dollars per barrel in April. It noted that while petrol prices rose rapidly to between 1,350 and 1,500 naira per litre during the spike, they have remained around 1,200 naira per litre, despite the global price decline.

Bello said, “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.”

While acknowledging that domestic fuel prices are influenced by refining costs, foreign exchange, logistics, financing and distribution expenses, the Commission maintained that market competition should ensure consumers benefit from lower costs.

Bello warned, “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.”

The Commission also urged consumers to report suspected anti-competitive conduct, misleading pricing practices and other forms of unfair market behaviour through its established complaint channels.