The Federal Competition and Consumer Protection Commission (FCCPC) has raised concerns over what it described as the continued exploitation of consumers by operators in the downstream petroleum sector despite the sharp decline in global crude oil prices. The commission disclosed this in a statement signed by Director, Corporate Affairs, Ondaje……
The Federal Competition and Consumer Protection Commission (FCCPC) has raised concerns over what it described as the continued exploitation of consumers by operators in the downstream petroleum sector despite the sharp decline in global crude oil prices.
The commission disclosed this in a statement signed by Director, Corporate Affairs, Ondaje Ijagwu on Sunday, saying its ongoing surveillance of the downstream petroleum market showed that recent reductions in gantry and pump prices by local refiners, depot operators, marketers and retailers were not proportional to the fall in international crude oil prices.
According to the FCCPC, crude oil prices have dropped to about $73 per barrel following the ceasefire between the United States and Iran and the reopening of the Strait of Hormuz, down from a peak of about $120 per barrel in April.
The commission noted that while petrol prices rose rapidly to between N1,350 and N1,500 per litre during the spike in crude prices, with diesel reaching about N2,000 per litre, consumers have yet to enjoy similar reductions despite the market reversal. It added that petrol, which sold for between N800 and N900 per litre in February, still averages about N1,200 nationwide, while some local refiners currently sell at gantry prices ranging from N1,025 to N1,075 per litre.
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The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, stressed that although the commission does not regulate fuel prices in a deregulated market, it has a statutory responsibility to protect consumers from exploitative and anti-competitive practices.
“To be clear, the Commission does not regulate or approve petroleum prices in a deregulated downstream market. Our responsibility under the Federal Competition and Consumer Protection Act, 2018, is to promote competitive markets, prevent anti-competitive conduct, and protect consumers from unfair, deceptive and exploitative business practices.
“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,” Bello said.
While acknowledging that domestic fuel prices are influenced by factors such as refining costs, foreign exchange rates, logistics, financing and distribution expenses, the commission said market competition should ordinarily ensure that lower input costs are reflected in prices paid by consumers.
Bello warned that the FCCPC would not hesitate to investigate and sanction any operator found engaging in conduct that undermines competition or exploits consumers.
“Market liberalisation does not diminish businesses’ obligations to compete fairly or consumers’ right to fair treatment. 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.
The commission also urged consumers to report suspected anti-competitive practices, misleading pricing and other unfair market behaviour through its official complaint channels.
