By Anthony Otaru, Abuja
The Federal Competition and Consumer Protection Commission (FCCPC) has placed petroleum marketers, depot operators and refiners on notice over their failure to significantly reduce fuel prices despite the sharp drop in global crude oil prices.
The Commission warned that sanctions could follow where investigations establish that consumers are being exploited through unjustifiable pricing practices.
The warning comes as international crude oil prices continue to decline following the ceasefire between the United States and Iran and the reopening of the Strait of Hormuz, one of the world’s busiest oil shipping routes.
The easing of tensions has reversed the sharp increase in crude prices recorded during the conflict, reducing production costs that had earlier triggered rapid hikes in petrol and diesel prices across Nigeria.
In a statement issued on Sunday, the FCCPC said findings from its ongoing surveillance of the downstream petroleum sector revealed that reductions in gantry and retail prices were insignificant and failed to reflect the substantial decline in global crude prices.
The Commission said its review covered local refiners, petroleum marketers, depot operators and retail outlets.
According to the FCCPC, operators were quick to increase pump prices when crude oil prices surged but have been reluctant to pass on the benefits of falling prices to consumers.
“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,” FCCPC Executive Vice Chairman and Chief Executive Officer, Tunji Bello, said.
Bello stressed that although the downstream petroleum sector operates under a deregulated regime, the Commission has the statutory responsibility to protect consumers against exploitative and anti-competitive practices.
He explained that the FCCPC does not regulate or approve petroleum prices but remains empowered under the Federal Competition and Consumer Protection Act, 2018, to investigate unfair market conduct.
Global crude prices, which climbed to about $120 per barrel at the height of hostilities in the Gulf, have since fallen to around $71 per barrel after the Strait of Hormuz reopened to international shipping.
The earlier spike prompted marketers across Nigeria to increase petrol prices to between N1,350 and N1,500 per litre, while diesel sold for as much as N2,000 per litre.
Despite the sharp drop in crude prices, Premium Motor Spirit (PMS) still sells for an average of N1,200 per litre across the country.
Local refiners also maintain gantry prices ranging from N1,025 to N1,075 per litre.
While acknowledging that domestic fuel prices are influenced by factors such as foreign exchange fluctuations, refining costs, logistics, financing and distribution expenses, the Commission insisted that consumers should ordinarily benefit from the lower international crude prices.
“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 warned.
The FCCPC cautioned marketers against using the deregulated market as a cover for profiteering, stressing that market liberalisation must not come at the expense of consumers.
The Commission also urged Nigerians to report suspected cases of price manipulation, anti-competitive conduct and other unfair market practices through its established complaint channels.
“Consumers should continue to report suspected anti-competitive conduct, misleading pricing practices and every form of unfair market behaviour. The Commission will not hesitate to act where violations are established,” Bello added.
The latest warning signals a possible crackdown on operators found to be taking undue advantage of the recent market developments, as pressure mounts on marketers to reflect the decline in global crude oil prices in domestic pump prices.
