The Federal Competition and Consumer Protection Commission (FCCPC) has raised concerns over what it described as the exploitation of consumers by operators in Nigeria’s downstream petroleum sector, warning that businesses found engaging in unfair pricing practices will face sanctions.
In a statement issued yesterday, the commission said its review of gantry prices charged by local refiners, marketers, depot operators and retail outlet operators revealed only marginal reductions in fuel prices despite the significant decline in global crude oil prices.
According to the FCCPC, the modest price adjustments are not commensurate with the sharp fall in international crude oil prices, raising concerns about possible exploitative practices in the market.
The Executive Vice Chairman and Chief Executive Officer of the Commission, Mr. Tunji Bello, clarified that the FCCPC does not regulate or approve petroleum prices in Nigeria’s deregulated downstream sector.
“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,” Bello said.
He added that while petroleum marketers often increase pump prices almost immediately whenever global crude oil prices rise, consumers are yet to enjoy corresponding reductions despite the recent decline in crude prices.
“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,” he stated.
Daily Trust reports that marketers have been under severe pressure following the fall in prices of crude oil after the US-Iran tensions ease.
Only last week, Dangote Refinery which has emerged as the dominant supplier of fuel slashed the gantry price by N50 with a litre of PMS sold at N1,210 to N1,260 per litre in Lagos.
The FCCPC however noted that following the ceasefire agreement between the United States and Iran two weeks ago and the reopening of the Strait of Hormuz, global crude oil prices have dropped to about $73 per barrel, down sharply from the peak of $120 per barrel recorded in April.
The FCCPC observed that crude oil prices have now returned to levels last seen in February. However, domestic fuel prices have remained relatively high.
During the surge in global oil prices between April and May, local refiners and marketers quickly raised pump prices across the country, with Premium Motor Spirit (PMS) selling for between N1,350 and N1,500 per litre, while diesel climbed to about N2,000 per litre.
In contrast, PMS sold for between N800 and N900 per litre in February.
Although some local refiners have reduced gantry prices to between N1,025 and N1,075 per litre, petrol is still selling for an average of about N1,200 per litre across many parts of the country.
While acknowledging that domestic fuel prices are influenced by factors such as refining costs, foreign exchange fluctuations, logistics, financing and distribution expenses, the FCCPC said market competition should ordinarily ensure that cost savings are passed on to consumers more promptly.
Bello stressed that deregulation does not exempt businesses from complying with competition laws or treating consumers fairly.
“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,” he said.
Grants approval to 48 additional loan apps
In another development, the FCCPC has granted full approval to 48 loan app companies that were previously given conditional approval.
According to the Commission’s updated list of approved digital money lenders, the latest approvals bring the Commission’s database of digital money lenders to 505
This means that a total of 505 companies have fully met the requirements to operate as digital lenders in the country and are ready to abide by the rules of the Commission, chief among which is ethical debt recovery as opposed to harassment and threats, for which loan sharks are known.
However, aside from the 505 lenders fully approved by the FCCPC, there are 32 other digital lenders granted registration waivers by the Commission because they are already licensed by the Central Bank of Nigeria (CBN).
