FG Threatens To Sanction Nigeria’s Fuel Marketers Over High Petrol Prices
The Federal Competition and Consumer Protection Commission (FCCPC) has decried what it described as the exploitation of consumers by operators in Nigeria's downstream petroleum sector, warning that it will sanction businesses found engaging in unfair pricing practices.
The commission made this known in a statement issued on Sunday by its Director of Corporate Affairs, Ondaje Ijagwu, following findings from its ongoing surveillance of the downstream oil market.
According to the FCCPC, its review of gantry prices charged by local refiners, marketers, depot operators and retail outlets showed only marginal reductions despite a sharp decline in global crude oil prices.
Reacting to the findings, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, Tunji Bello, said the commission is not responsible for fixing petroleum prices but has a statutory duty to protect consumers and promote fair competition.
“To be clear, the Commission does not regulate or approve petroleum prices in a deregulated downstream market” Bello said.
“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 questioned why marketers were quick to increase fuel prices when crude oil prices rose but slow 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," he said.
“Competitive markets must work fairly in both directions.”
The commission noted that crude oil prices have dropped 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 recorded in April.
It recalled that the earlier spike in crude prices prompted local refiners and marketers to rapidly increase pump prices, with petrol selling for between N1,350 and N1,500 per litre, while diesel rose to about N2,000 per litre during the height of hostilities between April and May.
The FCCPC added that although petrol averaged between N800 and ₦900 per litre in February, it is still being sold at around N1,200 per litre in many parts of the country, 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 factors such as refining costs, foreign exchange fluctuations, logistics, financing and distribution expenses, the commission said consumers should still benefit from lower costs where market conditions permit.
"Market liberalisation does not diminish businesses' obligations to compete fairly or consumers' right to fair treatment," Bello said.
"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 urged members of the public to report suspected anti-competitive practices, misleading pricing and other unfair market conduct through its official complaint channels.