FCCPC Cracks Down on Petroleum Marketers: Profiteering Amidst Falling Crude Prices Faces Regulatory Scrutiny
The Federal Competition and Consumer Protection Commission (FCCPC) has issued a stern warning to fuel marketers, depot operators, and all stakeholders within Nigeria’s downstream petroleum sector, signalling an intensified regulatory stance against profiteering. The Commission has declared its intent to impose sanctions on any operator found to be exploiting consumers, particularly in light of the recent significant decline in global crude oil prices.
This proactive measure stems from the FCCPC’s ongoing surveillance of the downstream petroleum market, which has revealed a concerning disconnect between falling international crude oil prices and the benefits accruing to Nigerian consumers. The Commission’s review of gantry prices from local refiners, marketers, depot operators, and retail outlets indicates only marginal price reductions, which do not adequately reflect the substantial drop in global crude benchmarks.
In a statement released on Sunday, the FCCPC, through its Director of Corporate Affairs, Ondaje Ijagwu, quoted the Executive Vice Chairman and Chief Executive Officer, Mr. Tunji Bello. Bello clarified that while the FCCPC does not directly regulate petroleum prices in a deregulated market, its statutory mandate compels it to ensure fair competition and safeguard consumers from exploitative business practices. “To be clear, the Commission does not regulate or approve petroleum prices in a deregulated downstream market,” Bello stated. “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 expressed particular concern over the observed asymmetry in price adjustments. He noted that fuel marketers frequently and swiftly increase pump prices in response to rising crude oil prices, yet exhibit a marked reluctance to pass on the benefits of falling global prices to consumers. “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 added.
The Commission highlighted that crude oil prices have recently fallen to approximately $73 per barrel, a significant decrease from a peak of around $120 per barrel recorded in April. This decline is attributed to factors including a ceasefire agreement between the United States and Iran and the reopening of the Strait of Hormuz. During the period of heightened global tensions, the FCCPC recalled that petrol prices had surged to between N1,350 and N1,500 per litre, with diesel reaching approximately N2,000 per litre. Despite these past price surges, the FCCPC observed that Premium Motor Spirit (PMS) is currently being sold at an average of N1,200 per litre nationwide, even though some local refiners have set gantry prices between N1,025 and N1,075 per litre. This is in contrast to February, when PMS was sold for between N800 and N900 per litre.
While acknowledging that domestic fuel pricing is influenced by a complex interplay of factors including refining costs, foreign exchange fluctuations, logistics, financing, and distribution expenses, the FCCPC maintains that robust market competition should translate into more favourable prices for consumers. Bello emphasised that market liberalisation does not absolve businesses of their obligations under competition law or their duty to treat consumers fairly. “Market liberalisation does not diminish businesses’ obligations to compete fairly or consumers’ right to fair treatment,” he asserted. “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 FCCPC has urged consumers to actively report any suspected anti-competitive practices, misleading pricing strategies, or other unfair market conduct through the Commission’s established complaint channels. This directive underscores the Commission’s commitment to fostering a transparent and equitable marketplace for all stakeholders.
