The Nigerian National Petroleum Company Limited (NNPCL) has reduced the pump price of Premium Motor Spirit (PMS), popularly known as petrol, by N60 per litre, as growing competition in the downstream petroleum sector begins to drive down retail prices.
A market survey conducted on Sunday showed that NNPCL filling stations now dispense petrol at N1,150 per litre, down from N1,210 per litre.
The latest adjustment is the second by the national oil company in less than two weeks, bringing its cumulative reduction between June 27 and July 5 to N110 per litre.
The development comes amid mounting pressure on marketers to reflect the recent drop in global crude oil prices in local pump prices.
Dangote Refinery had earlier cut its ex-gantry petrol price by N50, reducing it from N1,125 to N1,075 per litre in what marked its fourth downward review in recent weeks. Other marketers, including NIPCO, AA Rano and Ranoil, have also adjusted their pump prices to between N1,205 and N1,240 per litre, underscoring the increasing competition in the deregulated market.
The Federal Competition and Consumer Protection Commission (FCCPC), which recently raised concerns over the slow pace of price reductions, said Nigerians should not be denied the benefits of lower global oil prices.
In a statement issued on Sunday, the commission said its surveillance of the downstream petroleum market pointed to what it described as “undue exploitation of consumers,” warning that reductions at the pumps had so far fallen short of expectations.
“We are concerned 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,” the commission said.
FCCPC added that a review of gantry prices from local refiners, marketers, depot operators and retail outlets showed only “token reductions” despite the steep decline in international crude prices.
“The same market forces that triggered price increases must also be allowed to force prices down when crude prices fall. It is only fair and just that Nigerian consumers enjoy the benefit of lower prices when market fundamentals are moving in their favour,” the commission stated.
The agency also warned that it would not hesitate to act against exploitative pricing and anti-competitive conduct in the sector.
“Where there is evidence of price fixing, market allocation, collusive arrangements or abuse of dominance, the commission will not hesitate to deploy the full range of its enforcement powers under the FCCPA to protect consumers and preserve market integrity,” it said.
The commission recalled that petrol prices surged from between N800 and N900 per litre to as high as N1,350 and N1,500 per litre, while diesel rose to nearly N2,000 per litre, following tensions in the Gulf between April and May.
Although the FCCPC acknowledged that domestic fuel prices are influenced by factors such as foreign exchange volatility, logistics, financing, refining and distribution costs, it maintained that the easing in crude oil prices should ordinarily have led to more substantial relief at the pumps.
At the international market, Brent crude was trading at about $72 per barrel at the time of filing this report, while West Texas Intermediate hovered around $68 per barrel.
With NNPCL and Dangote Refinery leading the latest round of price cuts, pressure is expected to mount on other marketers to review their rates downward as competition for market share deepens in the deregulated petroleum market.