The Federal Competition and Consumer Protection Commission (FCCPC) has threatened to invoke regulatory sanctions against fuel operators exploiting consumers with high prices.
The Commission expressed concern over the slow reaction in the reductions in fuel prices across the country, despite the sharp decline in global crude oil prices.
The FCCPC expressed surprised that despite the significant drop in crude oil prices in the international market recently, their preliminary findings from ongoing surveillance of the downstream petroleum sector show that many local refiners, depot owners, marketers and filling station operators had only made marginal adjustments to pump prices.
In a statement on Sunday signed by the FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu,available to VDCInsights, the Commission said its review of gantry and retail prices reveal that Nigerians are yet to reap the benefits of dropping crude oil prices internationally.
According to the commission, the reductions recorded so far were too insignificant when compared with the steep decline in the price of crude oil on the global market.
Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said the situation raised questions about fairness in the deregulated downstream market, noting that fuel marketers often respond quickly to rising crude prices by increasing pump prices but are slower to reduce prices when the global market moves in the opposite direction.
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.”
He added, “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.”
The commission’s position comes against the backdrop of a sharp fall in international crude oil prices following a ceasefire between the United States and Iran and the reopening of the Strait of Hormuz, a key global oil shipping corridor.
Although crude prices have fallen from about 120 dollars per barrel at the height of Middle East tensions to around 73 dollars per barrel, petrol prices in Nigeria have remained high.
While fuel sold for between N800 and N900 per litre in February, the earlier surge in crude prices pushed pump prices to between N1,350 and N1,500 per litre in many parts of the country.
Regrettably, despite the drop in crude prices, petrol is still selling for an average of between N1250 to N1,300 per litre.
The FCCPC though noted that domestic fuel pricing is influenced by factors such as exchange rate fluctuations, logistics, financing, refining and distribution costs, it maintained that market competition should ordinarily result in more noticeable reductions in retail prices whenever the cost of crude oil falls substantially.
Bello warned that deregulation does not exempt operators from complying with competition and consumer protection laws.
He said “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 encouraged members of the public to report suspected cases of price manipulation, anti-competitive practices and other forms of consumer exploitation through its official complaint channels.
