Brent crude has fallen roughly 20 per cent, from a September peak of $115 per barrel to below $90 this week, yet Nigerian petrol still sells for up to N1,420 per litre in Abuja. That gap triggered a public confrontation on Tuesday, when the Federal Competition and Consumer Protection Commission demanded that refiners and marketers pass lower crude costs on to consumers — and the operators pushed back, accusing the regulator of misunderstanding the downstream market.

The dispute matters for anyone pricing fuel, hedging energy costs or planning refining capacity in Nigeria. The FCCPC has threatened to invoke its statutory powers; the industry has countered with an economics lesson and a reform agenda.

What did the regulator actually say?

FCCPC Executive Vice Chairman and CEO Tunji Bello said the commission was monitoring crude price movements and their effect on domestic petroleum prices. He was blunt about what he expects.

"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," Bello said. "We expect easing in wholesale petrol costs and for the resulting savings to reach consumers at the pump without undue delay."

In a statement issued by Director of Corporate Affairs Ondaje Ijagwu, the FCCPC said it would work with the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and other agencies to monitor wholesale and retail petrol prices. Bello warned the commission would act where evidence showed operators deliberately blocking price adjustments through anti-competitive practices.

"We are aware of the difficulties high pump prices have caused Nigerians for some time now," he said. "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."

Why do operators say prices cannot fall yet?

Billy Gillis-Harry, National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), said pump prices cannot fall below operating costs. He cited exchange rate volatility, asymmetric price transmission and downstream operating costs — petrol rises quickly when crude climbs but declines slowly when crude falls, partly because marketers must first sell existing stocks bought at higher prices. Imports and refining inputs are priced in dollars, so a weaker naira can keep landing and wholesale costs high even as global crude falls.

Ibrahim Shehu Yahaya, National Secretary of the Petroleum Dealers Association of Nigeria (PEDAN), said crude price changes take days or weeks to reach domestic markets because of cargo pricing, refining and depot delivery timelines. Pump prices also incorporate refining margins, shipping, transportation, handling charges and local taxes. Infrastructure deficits, he added, push transport costs up and produce price differences across locations.

The Crude Oil Refinery Owners Association of Nigeria (CORAN) made the same inventory argument, noting that large refiners, including the Dangote Refinery, purchased crude at higher prices. Full relief arrives only after existing inventories are exhausted and new supplies are bought at reduced rates, the association said.

What reforms are refiners demanding?

CORAN spokesperson Eche Idoko set out a broad agenda for the next phase of sector reform:

• Permanent institutionalisation of the naira-for-crude arrangement, with transparent eligibility covering all domestic refineries, including modular facilities
• Enforcement of the Domestic Crude Supply Obligation under Section 109 of the Petroleum Industry Act, while producers and refiners negotiate workable commercial terms
• A domestic crude pricing framework reflecting crude quality, delivery location and in-country transport costs
• More crude swaps and proximity-based supply, moving crude from producing areas to nearby refineries instead of through distant export infrastructure
• A gradual reduction in product imports, restricted to genuine shortfalls and strategic stock needs
• A refinery development framework offering longer-term funding, guarantees and refinancing for upgrades and new projects
• Investment in shared infrastructure: pipelines, storage terminals, depots, jetties and rail evacuation systems

Idoko warned that Nigeria's expanding refining capacity faces pressure from inadequate and commercially challenging crude supply unless stronger links form between upstream producers and local refineries.

Where does regional pricing fit in?

Idoko commended the NMDPRA for pursuing a West African regional fuel pricing benchmark to replace foreign indices and better reflect local supply, demand and logistics. NMDPRA Chief Executive Rabiu Abdullahi Umar noted that Africa's expanding refining capacity makes a regional reference price increasingly important.

"Virtually every major energy market in the world operates its own pricing index," Umar said. "The more we are able to produce, the more relevant it becomes to have our own reference pricing."

Despite producing crude oil and gas at scale, much of Africa still relies on international benchmarks for refined product prices. Several countries are expanding refining capacity to cut import dependence and strengthen regional energy security.

What is the consumer backdrop?

Petrol currently sells for N1,405 to N1,420 per litre in Abuja and N1,325 to N1,370 in Lagos. FCCPC figures compare this with the period before the US-Israel-Iran conflict began in February: Brent closed at $72.48 per barrel on February 27, the day before the conflict started, while petrol sold for between N839 and N925 per litre in Lagos and Abuja.

Marketers attribute the increase to Middle East volatility, particularly the blockade of the Strait of Hormuz, which handles at least 25 per cent of global oil traffic. Lower crude prices do not automatically mean immediate pump relief — but the FCCPC's intervention now forces operators to show, publicly, how changing market conditions feed into domestic prices.