Petroleum marketers in Nigeria have told the Federal Competition and Consumer Protection Commission (FCCPC) that a decline in international crude oil prices does not automatically translate into lower petrol prices at filling stations.
The operators made the clarification following the commission’s call for refiners and marketers to reflect the recent reduction in global crude oil prices in the cost of petrol and diesel sold to consumers.
The FCCPC had said Brent crude prices had fallen from a peak of $115 per barrel in September to below $90, urging operators to pass the resulting savings on to Nigerians without unnecessary delays.
However, the National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, said several factors beyond crude oil prices determine the final cost of petroleum products.
He explained that petrol prices often increase quickly when international crude prices rise but take longer to fall when the market moves in the opposite direction.
According to him, this is partly because marketers must first sell existing stocks purchased at higher prices before they can fully reflect lower replacement costs.
Gillis-Harry also identified fluctuations in the naira’s exchange rate as another factor affecting domestic fuel prices. He noted that petroleum imports and refining inputs are largely priced in US dollars, meaning a weaker naira could keep landing and wholesale costs high despite falling international crude prices.
Similarly, the National Secretary of the Petroleum Dealers Association of Nigeria (PEDAN), Ibrahim Shehu Yahaya, said changes in crude oil prices could take several days or weeks to reflect at filling stations.
He explained that the process involves cargo pricing, refining and the transportation of petroleum products to depots before they are distributed to retail outlets.
Yahaya added that the price consumers pay at filling stations also includes refining margins, transportation, handling charges and local taxes, rather than crude oil costs alone.
The marketers maintained that these factors explain why domestic petrol prices do not always move in line with changes in the international oil market.
They also called on the FCCPC to engage industry stakeholders to gain a better understanding of the operations and pricing structure of the downstream petroleum sector.
The commission had earlier expressed concern over the continued high cost of petrol and diesel despite the decline in international crude prices.
Its Executive Vice Chairman and Chief Executive Officer, Tunji Bello, said a sustained reduction in crude oil prices should result in lower wholesale costs and, consequently, cheaper petroleum products for consumers.
The FCCPC also disclosed that petrol prices currently range between ₦1,405 and ₦1,420 per litre in Abuja, while prices in Lagos stand between ₦1,325 and ₦1,370 per litre.
These figures are significantly higher than the prices recorded on February 27, when petrol sold for between ₦839 and ₦925 per litre in Lagos and Abuja respectively.
Bello said the commission would work with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to monitor wholesale and retail petroleum prices.
He warned that the FCCPC would take appropriate action where evidence of anti-competitive conduct or unfair market practices showed that operators were preventing consumers from benefiting from lower production and supply costs.
The disagreement highlights the challenges of translating changes in the international crude oil market into immediate reductions in domestic fuel prices, particularly amid exchange rate pressures, existing inventories and distribution costs.
