Consumers Should Benefit Too: FCCPC Pressures Fuel Dealers Over Slow Pump Price Reductions
Regulator says declining crude oil prices should translate into fairer fuel prices, while marketers insist inventory costs, exchange rates and logistics continue to shape retail pricing.
FCCPC Raises Concern Over Slow Price Adjustments
THE Federal Competition and Consumer Protection Commission (FCCPC) has cautioned operators across Nigeria’s downstream petroleum industry against exploiting consumers by delaying reductions in petrol prices despite a sustained decline in international crude oil prices.
The commission said its market surveillance showed that although global crude prices have eased significantly following the de-escalation of geopolitical tensions in the Middle East, many retail outlets have only made marginal adjustments to pump prices, leaving consumers yet to enjoy the full benefits of lower international oil prices.
FCCPC Executive Vice Chairman and Chief Executive Officer, Tunji Bello, stressed that while the commission does not regulate fuel prices under Nigeria’s deregulated downstream market, it remains empowered by the Federal Competition and Consumer Protection Act to prevent anti-competitive practices and protect consumers from unfair pricing.
According to Bello, competitive markets should respond fairly to both rising and falling costs, noting that marketers often increase pump prices quickly whenever crude prices rise but appear much slower to reduce prices when market conditions improve.
Landing Costs Fall Below Local Refinery Prices
The commission’s warning comes amid fresh market data showing that the landing cost of imported Premium Motor Spirit (PMS) has dropped to approximately ₦983.92 per litre, falling below the ₦1,125 per litre gantry price currently charged by Dangote Petroleum Refinery.
Figures released by the Major Energies Marketers Association of Nigeria (MEMAN) indicate that short-term import costs have softened considerably, reflecting the decline in global crude oil prices after tensions between Israel and Iran eased and commercial shipping resumed through the Strait of Hormuz.
The development has fuelled public expectations that petrol prices should decline further, with many consumer advocates arguing that pump prices ought to move below the ₦1,000-per-litre mark after previously trading between ₦800 and ₦900 before the recent geopolitical crisis.
Marketers Cite Commercial Realities
Industry stakeholders, however, insist that crude oil prices represent only one element in determining retail fuel prices.
The Executive Secretary of MEMAN, Clement Isong, explained that marketers continue to adjust prices according to prevailing commercial realities, including the cost of inventories purchased when international prices were much higher.
He said many operators are reluctant to immediately slash prices because doing so would result in significant financial losses on existing stock acquired during the recent period of elevated crude prices.
Similarly, the National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, said retailers are balancing market competition with supply security, adding that refiners and marketers must first exhaust inventories procured at higher costs before implementing more substantial price reductions.
Officials within the Crude Oil Refinery Owners Association of Nigeria (CORAN) also pointed to exchange-rate volatility, transportation, financing, insurance and logistics costs as additional factors preventing an immediate pass-through of lower international prices to consumers.
Competition, Consumer Protection & Market Expectations
Despite acknowledging these commercial realities, the FCCPC maintained that businesses operating in a competitive market have an obligation to ensure that genuine cost savings eventually reach consumers.
The commission warned that it would investigate any credible evidence of price manipulation, collusion, deceptive practices or other anti-competitive conduct capable of undermining fair market competition.
Consumers were also encouraged to report suspected cases of unfair pricing through the commission’s complaint channels.
Signs of Price Movement Emerging
Although marketers insist further reductions will occur gradually, some price adjustments have already begun across the sector.
The Nigerian National Petroleum Company Limited (NNPC Ltd.) recently implemented two pump price reductions within one week, cutting a cumulative ₦125 per litre.
Dangote Petroleum Refinery also reduced its gantry price by ₦50 per litre while lowering coastal supply prices following the easing of tensions in the Middle East.
Analysts believe the coming weeks will determine whether continued stability in international oil markets and the foreign exchange market translates into more significant relief for Nigerian consumers.
