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 said.
Global crude prices have eased significantly following the ceasefire between the United States (U.S.) and Iran and the reopening of the Strait of Hormuz, with Brent crude trading for $71.99 per barrel after peaking at about $120 in April. Prices have largely returned to levels recorded in February.
The earlier surge in crude prices prompted marketers and refiners to increase petrol pump prices nationwide to between N1,350 and N1,500 per litre, while diesel climbed to around N2,000 per litre as geopolitical tensions escalated between April and May.
In February, petrol sold for between N800 and N900 per litre.
Although some local refiners have since reduced their gantry prices to between N1,025 and N1,075 per litre, retail prices across much of the country still average around N1,200 per litre.
FCCPC acknowledged that domestic fuel prices were influenced by several commercial factors, including refining costs, exchange rate movements, logistics, financing and distribution expenses. However, it maintained that the decline in international crude prices should have translated into more noticeable savings for consumers.
Bello warned that market liberalisation “does not exempt businesses” from complying with competition laws.
“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 said.
He also encouraged consumers to report suspected anti-competitive practices, misleading pricing and other unfair market behaviour through the Commission’s complaint channels.
Industry experts, however, argued that movements in crude oil prices alone would not determine domestic fuel prices.
Professor of Economics, Wumi Iledare, said calls for lower petrol prices were justified given the recent moderation in crude oil prices, but noted that fuel prices often exhibit what economists describe as “asymmetric price transmission”.
Similarly, Partner at Kreston Pedabo, Olufemi Idowu, said that although consumers expected lower fuel prices following the decline in crude prices, several domestic cost pressures remained.
Meanwhile, Chairman, Board of Trustees of the Community Development Committees of Niger Delta Oil and Gas Producing Areas, Joseph Ambakederimo, said the debate should extend beyond fuel prices to increasing Nigeria’s crude oil production.
He argued that the country’s present production of about 1.5 million barrels per day remains inadequate for an economy of Nigeria’s size, despite recent reports that output exceeded its Organisation of the Petroleum Exporting Countries (OPEC) quota.
