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•Warns marketers against denying Nigerians benefits of falling crude prices
By Beifoh Osewele
The Federal Competition and Consumer Protection Commission (FCCPC) has warned petroleum refiners and marketers against keeping petrol and diesel prices artificially high as international crude oil prices fall below $90 per barrel for the first time since August 31, raising expectations of relief for Nigerian consumers who have endured months of rising fuel costs.
The commission said it was closely monitoring developments in the international oil market and domestic pump prices to ensure that any reduction in the cost of crude oil and refined petroleum products was passed on to consumers, warning that it would take appropriate action against operators found engaging in anti-competitive practices or deliberately withholding the benefits of lower costs.
The warning came yesterday as Brent crude, the international benchmark, fell by three per cent to $89.70 per barrel, while the United States West Texas Intermediate (WTI) declined by 2.13 per cent to $84.53, following indications that tensions involving the United States and Iran could ease.
The development presents contrasting implications for Nigeria, Africa’s major crude oil producer, as lower international prices could reduce government revenue and foreign exchange earnings while potentially easing the burden of high petrol and diesel prices on households, transport operators, manufacturers and other businesses.
Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, in a statement issued by the commission’s Director of Corporate Affairs, Ondaje Ijagwu, said the continued decline in crude prices should translate into lower petroleum product prices if the trend was sustained.
“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,” Bello said.
The commission disclosed that petrol currently sells for between N1,405 and N1,420 per litre in Abuja and between N1,325 and N1,370 in Lagos, reflecting the sharp increase in domestic fuel costs since the outbreak of the conflict involving the United States, Israel and Iran earlier in the year.
According to the FCCPC, Brent crude traded at $72.48 per barrel on February 27, before the outbreak of the war, when petrol sold for between N839 and N925 per litre at filling stations in Lagos and Abuja.
Crude prices subsequently climbed to a peak of $115 per barrel in September amid disruptions and uncertainty surrounding the conflict, particularly the blockade of the Strait of Hormuz, a strategic shipping route through which at least 25 per cent of global oil traffic passes, according to the commission.
The latest decline to below $90 represents a drop of more than $25 per barrel from the September peak, strengthening expectations that lower international costs could eventually translate into reduced domestic fuel prices.
Bello acknowledged the difficulties Nigerians had experienced as a result of high pump prices, assuring that the commission would work with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and other relevant government agencies to monitor developments across the petroleum supply chain.
“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,” he said.
The commission’s intervention comes amid concerns over the speed at which changes in international crude oil prices are reflected in Nigeria’s domestic petroleum market, particularly whether consumers benefit from declining costs as quickly as they bear the burden of increases.
Although lower crude prices do not automatically produce an equivalent reduction in pump prices because of refining, transportation, distribution, exchange rate and inventory costs, a sustained decline could create room for downward adjustments, depending on prevailing market conditions.
For Nigeria, however, the development also carries significant fiscal implications, as crude oil exports remain an important source of foreign exchange and government revenue.
A prolonged decline in international oil prices could weaken export receipts and reduce the revenue available to the Federal Government, potentially complicating fiscal planning and the financing of public expenditure.
Conversely, lower petroleum product prices could ease transportation and production costs, reduce pressure on household spending and provide some relief to businesses whose operations have been adversely affected by high energy costs.
The latest downturn followed remarks by United States President Donald Trump on Monday indicating that Washington would hold off on further military strikes against Iran following appeals from countries in the Middle East, including Qatar, Saudi Arabia, the United Arab Emirates, Bahrain and Kuwait.
Trump suggested that the conflict could end relatively soon, saying Tehran was engaging Washington in a more conciliatory manner.
“The United States of America is fully locked and loaded with the best equipment ever made, and we don’t think there’s going to be any reason to use it,” he said.
The President explained that his decision to suspend additional strikes followed appeals from regional governments seeking to prevent further escalation of the conflict.
Oil prices had earlier fallen below $95 per barrel following the November 4 United States midterm elections, in which Democrats secured control of Congress, adding to uncertainty over Washington’s approach to the Middle East conflict.
With crude now trading below $90, attention has shifted to whether the downward movement will be sustained and how quickly refiners and petroleum marketers will adjust their prices.
For Nigerian consumers, the immediate concern remains whether the decline in international crude prices will translate into meaningful reductions at filling stations, while the Federal Government faces the competing challenge of protecting oil revenue and ensuring that lower energy costs provide relief to households and businesses.
