The Federal Competition and Consumer Protection Commission (FCCPC) has expressed concern over what it described as the continued exploitation of consumers by operators in the downstream petroleum sector despite the recent decline in global crude oil prices.
According to a statement by the Commission’s director corporate affairs Ondaje Ijagwu, it was disclosed that 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 have been marginal and are not proportionate to the significant drop in international crude oil prices.
The Executive Vice Chairman and Chief Executive Officer of the FCCPC, Mr. Tunji Bello, said although the Commission does not regulate or approve petroleum prices in Nigeria’s deregulated downstream market, it is mandated under the Federal Competition and Consumer Protection Act, 2018, to promote fair competition and protect consumers from exploitative business practices.
He noted that marketers have historically responded swiftly by increasing pump prices whenever crude oil prices rise, but have been slow to pass on the benefits of falling crude prices to consumers.
“Competitive markets must work fairly in both directions,” Bello said, stressing that market liberalisation does not absolve businesses of their responsibility to compete fairly or consumers’ right to fair treatment.
The Commission observed that following the ceasefire between the United States and Iran and the reopening of the Strait of Hormuz two weeks ago, global crude oil prices declined to about $73 per barrel from a peak of $120 recorded in April, returning to levels last seen in February.
Despite the significant reduction in crude prices, the FCCPC noted that petrol, which sold for between N800 and N900 per litre in February, is still retailing at an average of N1,200 per litre nationwide, while some local refiners have fixed gantry prices between N1,025 and N1,075 per litre.
While acknowledging that domestic fuel prices are influenced by several factors, including refining costs, foreign exchange fluctuations, logistics, financing and distribution expenses, the Commission said market competition should ordinarily facilitate quicker transmission of lower costs to consumers.
Bello warned that where credible evidence reveals anti-competitive conduct, consumer exploitation or violations of the Federal Competition and Consumer Protection Act, the Commission will investigate and take appropriate enforcement action against offending operators.
He 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.
