The Federal Competition and Consumer Protection Commission has expressed concern over what it described as potential consumer exploitation in Nigeria’s downstream petroleum sector, citing the failure of fuel prices to fall significantly despite a sharp decline in global crude oil prices.

According to the commission, ongoing market surveillance indicates that local refiners, depot operators, fuel marketers, and filling station owners have made only marginal reductions in pump prices, despite the substantial drop in international crude oil prices. It said the limited price adjustments do not reflect the scale of the decline in global oil prices.

In a statement issued on Sunday, the FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu, said the commission’s review of prevailing gantry and retail fuel prices indicated that consumers had yet to fully benefit from the recent decline in global crude oil prices.

The statement read, “The Federal Competition and Consumer Protection Commission has expressed concern over findings from an ongoing surveillance of the downstream petroleum market, suggesting undue exploitation of consumers.

“A review of the gantry prices of local refiners, marketers, depot operators, and retail outlet operators revealed token reductions in prices that are not commensurate with the steep fall in crude prices in the global market.”

The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said the commission was concerned by what it described as an apparent imbalance in the downstream petroleum sector’s response to fluctuations in global crude oil prices.

According to Bello, operators in the sector are often quick to increase pump prices when crude oil prices rise, but are far slower to reduce prices when global oil prices decline, depriving consumers of the full benefits of lower costs.

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.

“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 commission’s concerns come against the backdrop of a sharp decline in global oil prices following a ceasefire agreement between the United States and Iran and the reopening of the Strait of Hormuz, a key global oil shipping route.

It was reported last week that petrol prices had remained elevated despite a sharp decline in global crude oil prices, which fell to about $73 per barrel on Wednesday after months of volatility.

Crude oil prices had surged to nearly $120 per barrel in April amid concerns over possible supply disruptions linked to tensions in the Middle East.

However, following easing geopolitical tensions, prices have retreated to around $73 per barrel, returning to levels recorded earlier in the year.

The earlier spike in crude prices prompted swift increases in domestic fuel prices, with petrol selling for between N1,350 and N1,500 per litre in many parts of the country, while diesel rose to about N2,000 per litre.

By comparison, petrol had sold for between N800 and N900 per litre earlier in the year before the surge in global oil prices.

Although the FCCPC acknowledged that domestic fuel prices are influenced by several factors, including exchange rate movements, logistics, financing, refining, and distribution costs, it maintained that prevailing market conditions should ordinarily have resulted in more significant reductions in pump prices through the operation of competitive market forces.

Bello said, “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 urged Nigerians to report suspected cases of anti-competitive conduct, price manipulation, and other unfair market practices through the commission’s established complaint channels.

The FCCPC’s concern is expected to rekindle debate over the effectiveness of Nigeria’s deregulated petroleum market, as consumers and industry stakeholders continue to question why the sharp decline in international crude oil prices has not been matched by proportionate reductions in pump prices.