Yemi Obafemi
The Federal Competition and Consumer Protection Commission (FCCPC) has threatened to sanction operators in the downstream petroleum sector found exploiting consumers by failing to reduce fuel prices in line with the recent decline in global crude oil prices.
The warning was contained in a statement signed by the Commission’s Director of Corporate Affairs, Ondaje Ijagwu, following an ongoing market surveillance which found that reductions in gantry and retail fuel prices by local refiners, marketers, depot operators and retail outlets were not commensurate with the sharp fall in crude oil prices.
The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said the Commission’s findings showed only marginal price reductions despite significant changes in the international oil market.
“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 noted that while marketers often raise pump prices almost immediately whenever crude oil prices increase, consumers have yet to benefit significantly from the recent price decline.
“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 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 $120 per barrel in April. However, petrol continues to sell at an average of N1,200 per litre across the country.
While acknowledging that domestic fuel prices are influenced by factors including refining costs, foreign exchange movements, logistics, financing and distribution expenses, the FCCPC said consumers should have seen greater price relief.
Bello warned that although the downstream petroleum market is deregulated, operators must compete fairly and comply with the Federal Competition and Consumer Protection Act.
“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 conduct, misleading pricing practices and other forms of unfair market behaviour through its complaint channels.
