The FCCPC says falling crude oil prices should lead to cheaper petrol and diesel for Nigerian consumers without undue delay.
The Federal Competition and Consumer Protection Commission (FCCPC), on Tuesday put petroleum refiners and marketers on notice over the continued decline in international crude oil prices.
The commission warned that it would not tolerate anti-competitive practices that prevent Nigerians from benefiting from lower production and supply costs.
The commission said the retreat in crude prices from a September peak of $115 per barrel to below $90 this week should begin to translate into cheaper petrol and diesel, insisting that sustained reductions in input costs would make it increasingly difficult for operators to justify maintaining elevated pump prices.
Speaking against the backdrop of public enquiries over the failure of domestic pump prices to reflect movements in the international oil market, FCCPC Executive Vice Chairman/ Chief Executive, Mr. Tunji Bello, said the commission was closely monitoring crude price movements and their implications for domestic petroleum product pricing.
Bello maintained that if the decline in crude prices persisted, refiners and marketers would have little justification for keeping petrol and diesel prices at current levels.
He said, “If the decline in crude prices is sustained, there is no justification for refiners and marketers to continue to keep petrol and diesel prices relatively high. We expect easing in wholesale petrol costs and for the resulting savings to reach consumers at the pump without undue delay.”
The mive comes amid mounting pressure on households and businesses over the cost of energy, with petrol prices still averaging between N1,405 and N1,420 per litre in Abuja and N1,325 and N1,370 in Lagos.
The commission’s intervention raises fresh questions over the extent to which international crude price movements are being transmitted to domestic fuel prices, particularly as consumers continue to bear the burden of elevated transportation, production and distribution costs.
Figures released by the FCCPC showed the sharp divergence between current pump prices and those prevailing before the outbreak of the US-Israel-Iran conflict in February.
According to the commission, Brent crude futures closed at $72.48 per barrel on February 27, the day before the conflict began, while petrol sold for between N839 and N925 per litre in Lagos and Abuja.
Since then, escalating geopolitical tensions in the Middle East, particularly the blockade of the Strait of Hormuz, have been cited by petroleum marketers as major drivers of international oil market volatility and rising domestic fuel prices.
The strategic waterway accounts for at least 25 per cent of global oil traffic, making disruptions to shipping and supply routes a major source of uncertainty for international crude and petroleum product markets.
However, with Brent prices now retreating below $90 per barrel, the FCCPC is increasingly concerned that consumers may not receive corresponding relief if refiners and marketers fail to adjust their pricing structures.
Bello said the commission would strengthen collaboration with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and other relevant government agencies to track developments in both wholesale and retail petroleum markets.
In a statement by Director of Corporate Affairs, FCCPC, Ondaje Ijagwu, Bello warned that the commission would invoke its statutory powers where evidence emerges that operators were deliberately frustrating price adjustments through anti-competitive conduct or unfair market practices.
Bello said, “We are aware of the difficulties high pump prices have caused Nigerians for some time now. Let me reassure that the Commission will continue to work with the Nigerian Midstream and Downstream Petroleum Regulatory Authority and other relevant government agencies to track wholesale and retail petrol prices.
“Where there is evidence of anti-competitive conduct or unfair practices that prevent consumers from benefiting from lower costs, we will take appropriate action within our mandate.”
While a fall in crude prices does not automatically translate into an immediate reduction in pump prices, particularly where refiners and marketers are still selling products acquired at higher costs, the FCCPC’s intervention signals that the commission expects operators to demonstrate how changing market conditions are reflected in their pricing decisions.
The commission’s position places renewed attention on pricing behaviour across the downstream petroleum market, where the relationship between crude oil costs, refining expenses, exchange rates, logistics, product inventories and retail prices remains critical to determining the final cost borne by consumers.