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The Federal Competition and Consumer Protection Commission (FCCPC) Sunday warned operators in the downstream petroleum sector against exploiting consumers following refusal to reflect the sharp decline in global crude oil prices at retail pump stations.
In a terse statement, Executive Vice Chairman/Chief Executive of the Commission, Tunji Bello, noted that ongoing surveillance of the downstream petroleum market by the commission had revealed that reductions in gantry prices by local refiners, marketers, depot operators, and retail outlet operators had been marginal and far below current global crude oil prices.
According to a statement issued by FCCPC spokesman, Ondaje Ijagwu, Bello stressed that although the commission does not regulate or approve petroleum prices in the country’s deregulated downstream market, it would not hesitate to investigate and sanction operators found to be engaging in anti-competitive, deceptive, or exploitative practices in violation of the Federal Competition and Consumer Protection Act (FCCPA), 2018.
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 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.”
According to the FCCPC boss, international crude prices have dropped sharply to about $73 per barrel following the ceasefire agreement between the United States and Iran and the reopening of the Strait of Hormuz, compared with a peak of about $120 per barrel recorded in April at the height of tensions in the Gulf.
The commission noted that crude prices had effectively returned to their February levels, yet the decline had not been matched by a commensurate reduction in domestic fuel prices.
The earlier surge in crude prices prompted local refiners and marketers to increase pump prices rapidly, with petrol selling for between N1,350 and N1,500 per litre. At the same time, diesel climbed to about N2,000 per litre as geopolitical tensions escalated between April and May.
By comparison, PMS sold for between N800 and N900 per litre in February.
However, despite the reversal in global crude prices, the FCCPC observed that petrol currently sells at an average of about N1,200 per litre nationwide, while some local refiners have fixed gantry prices between N1,025 and N1,075 per litre.
As of the time of filing this report, global crude oil, Brent crude futures were at $72.44 a barrel from over $100 at the pre-war level.
While acknowledging that domestic fuel prices are influenced by several commercial variables, including refining costs, foreign exchange movements, logistics, financing, and distribution expenses, Bello maintained that competitive market forces should have enabled consumers to benefit more quickly from lower input costs.
He stressed that market liberalisation does not absolve businesses of their responsibility to compete fairly or deny consumers the right to fair pricing.
According to him, “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 urged consumers to report suspected anti-competitive conduct, misleading pricing practices, and other forms of unfair market behaviour through the commission’s established complaint channels.
He assured that every credible complaint would receive appropriate attention.
