FCCPC Clashes With Fuel Marketers Over High Pump Prices Despite Global Oil Plunge

The Federal Competition and Consumer Protection Commission (FCCPC) on Sunday, June 28, issued a strong caution to operators within Nigeria's downstream petroleum sector. The warning comes as these operators have largely failed to reduce petrol pump prices, even though global crude oil prices have experienced a significant decline.

According to a statement released by Tunji Bello, the Commission's Executive Vice Chairman and Chief Executive, ongoing monitoring of the downstream petroleum market by the FCCPC has revealed that price adjustments at gantries by local refiners, marketers, depot operators, and retail outlets have been minimal. These reductions, Bello noted, are far from reflecting the current substantial drop in international crude oil prices.

Bello emphasized that while the FCCPC does not regulate or set petroleum prices in Nigeria's deregulated downstream market, it retains the authority to investigate and penalize operators. Such actions would target those found engaging in anti-competitive, deceptive, or exploitative practices, which are direct violations of the Federal Competition and Consumer Protection Act (FCCPA), 2018.

He further clarified the Commission's position, stating, "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."

The FCCPC boss highlighted that international crude prices have sharply fallen to approximately $73 per barrel. This significant drop follows a ceasefire agreement between the United States and Iran, alongside the reopening of the Strait of Hormuz. This is a stark contrast to the peak of around $120 per barrel recorded in April, during heightened tensions in the Gulf region.

The Commission pointed out that crude prices have effectively reverted to their February levels. However, this global decline has not been matched by a corresponding reduction in domestic fuel prices. The earlier surge in Middle East tensions, including the Israel-Iran ceasefire and Strait of Hormuz reopening, had previously pushed local petrol prices to between N1,350 and N1,500 per litre, with diesel reaching about N2,000 per litre. Despite these geopolitical developments easing, petrol is still being sold for around N1,200 per litre across many parts of Nigeria, raising expectations that pump prices should ideally drop below N1,000 per litre.