Crude price fall: FCCPC to probe exploitation in oil market
The Federal Competition and Consumer Protection Commission (FCCPC) has expressed concern over findings from an ongoing surveillance of the downstream petroleum market suggesting undue exploitation of consumers.
In a statement on Sunday signed by its Director of Corporate Affairs, Ondaje Ijagwu, the FCCPC stated that a review of the gantry prices of local refiners, marketers, depot operators and retail outlet operators revealed token reductions in prices that are not commensurate with the steep fall in crude prices in the global market.
Reacting, the Executive Vice Chairman and Chief Executive Officer of the FCCPC, Mr. Tunji Bello, said in the statement: “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.
“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.”
Following a ceasefire accord between U.S. and Iran two weeks ago and the reopening of the Straits of Hormuz, crude prices have fallen to $73, a sharp drop from the peak of $120 per barrel in April.
Across the global market, crude prices have since returned to the February levels.
The earlier spike in crude prices saw local refiners and marketers raising pump prices swiftly across the country, with petrol price climbing to between N1,350 to N1,500 and diesel selling N2,000 as hostilities intensified in the gulf between April and May.
In February, common PMS (petrol) averaged between N800 and N900.
Across the country today, PMS is still sold at average of N1,200 while some local refiners fixed between N1,025 and N1,075 as their gantry prices.
Though recognising that domestic prices are influenced by a range of commercial and market factors (including refining costs, foreign exchange movements, logistics, financing and distribution expenses), the Commission however said it expected competitive market dynamics to have eased the swift transmission of resulting cost efficiencies to consumers.
Mr. Bello further stated: “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 encouraged consumers to continue reporting suspected anti-competitive conduct, misleading pricing practices and other forms of unfair market behaviour through the Commission’s established complaint channels.
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