The Federal Competition and Consumer Protection Commission (FCCPC) has expressed concern over what it described as the exploitation of Nigerian consumers by players in the downstream petroleum sector, warning that it will investigate and sanction businesses found to be engaging in unfair pricing practices despite the sharp decline in global crude oil prices.
The Commission on Sunday said findings from its ongoing surveillance of the downstream petroleum market revealed that reductions in gantry prices by local refiners, marketers, depot operators and retail outlet operators were merely token cuts that did not reflect the significant fall in international crude oil prices.
Reacting to the findings, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, clarified that although the Commission does not regulate fuel prices in the deregulated market, it has the responsibility to ensure fair competition and protect consumers from exploitative 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,” Bello said.
He expressed concern over what he described as the slow pace of price reductions despite the significant drop in crude oil prices.
“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,” he added.
The Commission noted that crude oil prices have fallen sharply following a ceasefire agreement between the United States and Iran two weeks ago and the reopening of the Strait of Hormuz.
According to the FCCPC, crude prices have dropped to about $73 per barrel from a peak of $120 recorded in April, effectively returning to February levels across the global market.
It recalled that during the period of heightened tensions in the Gulf between April and May, local refiners and petroleum marketers swiftly increased pump prices across the country, with petrol selling for between N1,350 and N1,500 per litre, while diesel climbed to about N2,000 per litre.
By comparison, Premium Motor Spirit (PMS) sold for between N800 and N900 per litre in February.
The Commission observed that despite the substantial decline in crude oil prices, petrol is still being sold at an average of N1,200 per litre nationwide, while some local refiners have fixed gantry prices at between N1,025 and N1,075 per litre.
While acknowledging that domestic fuel prices are influenced by several commercial and market factors, including refining costs, foreign exchange fluctuations, logistics, financing and distribution expenses, the FCCPC maintained that consumers should have experienced more meaningful reductions.
“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,” Bello said.
He also urged Nigerians to continue reporting suspected anti-competitive conduct, misleading pricing practices and other forms of unfair market behaviour through the Commission’s established complaint channels.
The FCCPC reiterated that while it respects the principles of a deregulated petroleum market, it remains committed to ensuring that market participants compete fairly and that consumers are protected from exploitative practices.
Boluwatife Enome
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