By Atiku Sarki, Abuja
The Federal Competition and Consumer Protection Commission (FCCPC) has raised concerns over what it describes as the exploitation of consumers by operators in the downstream petroleum sector, warning that it will sanction any marketer found engaging in unfair or anti-competitive practices.
In a statement issued in Abuja by the Commission’s Director of Corporate Affairs, Ondaje Ijagwu, the FCCPC said its ongoing surveillance of the downstream petroleum market revealed that reductions in gantry prices by local refiners, marketers, depot operators and retail outlets have been minimal and do not reflect the sharp decline in global crude oil prices.
Reacting to the development, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said: “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 increasing pump prices whenever crude oil prices rise, it is taking far too long for consumers to benefit when crude oil prices fall. Competitive markets must work fairly in both directions.”
According to the commission, following a ceasefire between the United States and Iran two weeks ago and the reopening of the Strait of Hormuz, global crude oil prices fell to about $73 per barrel, down sharply from the $120 per barrel recorded in April.
The FCCPC noted that crude oil prices have since returned to their February levels. However, despite the decline, fuel prices in Nigeria have remained relatively high.
During the spike in crude oil prices between April and May, local refiners and marketers quickly increased pump prices, with petrol selling for between N1,350 and N1,500 per litre, while diesel rose to about N2,000 per litre.
In February, Premium Motor Spirit (PMS) sold for between N800 and N900 per litre.
Today, however, the average retail price remains around N1,200 per litre, even though some local refiners have reduced their gantry prices to between N1,025 and N1,075 per litre.
While acknowledging that domestic fuel prices are influenced by factors such as refining costs, foreign exchange fluctuations, logistics, financing and distribution expenses, the Commission maintained that competitive market forces should have translated the reduction in global crude oil prices into lower prices for consumers.
Mr. Bello added: “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.”
The FCCPC also urged consumers to report suspected anti-competitive practices, misleading pricing and other forms of unfair market behaviour through the commission’s established complaint channels.