The Federal Competition and Consumer Protection Commission (FCCPC), a Nigerian agency saddled with the responsibility of protecting consumers’ rights, has raised concerns about the price of petroleum in the country despite the global crash of crude oil prices.
According to a statement by the Executive Vice Chairman and Chief Executive Officer of the FCCPC, Mr Tunji Bello, “findings from an ongoing surveillance of the downstream petroleum market suggest undue exploitation of consumers”.
The statement signed by the Agency’s Director of Corporate Affairs, Ondaje Ijagwu, noted there has only been a token reduction in the gantry prices of petrol in retail outlets, which does not commensurate with the steep fall in crude prices in the global market.
ConsumerPaddy reports that the price of PMS across Nigeria skyrocketed following the U.S./Israel vs. Iran war, which led to the closure of the Strait of Hormuz. Retail outlets in Nigeria increased their PMS prices to as high as N1,500/litre from around N800, as crude oil also traded at a peak of $120 per barrel in April.
The ceasefire agreement between the US and Iran two weeks ago has seen the crude oil price crash to as low as $73, yet there has been less than N100 reduction in PMS price across different filling stations in Nigeria when compared to previous weeks before the crude price fell.
FCCPC raises concern 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”.
“Across the country today, PMS is still sold at an average of N1,200 while some local refiners fixed between N1,025 and N1,075 as their gantry prices”.
ConsumerPaddy team had initially monitored the social media conversation surrounding the reluctance of the Dangote Refinery and most petrol marketers to reduce the pump price of petroleum; there were dissenting opinions.
While some netizens argue that stakeholders in the Nigerian oil market are quick to hike prices when global crude prices rise, others defend that the reluctance to reduce might be as a result of the high priced crude oil still in stock.
Regardless, it is a simple logic that if business owners can hike prices overnight despite purchasing cheaper due to an increase in the market price, it should be easy to reduce prices in accordance with the new market price.
