The Federal Competition and Consumer Protection Commission (FCCPC) has warned oil marketers against exploitation, saying the current petrol pump prices do not match the global crude cost reduction.
The FCCPC, in a statement on Sunday, said findings from its
ongoing surveillance of the downstream petroleum market suggest undue
exploitation of consumers.
The commission said its 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.
The agency said following a ceasefire accord between the
United States (US) 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.
According to the agency, crude prices have since returned to
the February levels across the global market.
“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,” the statement reads.
“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 expects competitive market dynamics to have eased the swift
transmission of resulting cost efficiencies to consumers.”
The FCCPC also vowed to sanction profiteers.
‘CONSUMERS NOT BENEFITING FROM FALLING CRUDE OIL PRICES’
Tunji Bello, the executive vice-chairman and chief executive
officer (CEO) of the FCCPC, said although the commission does not regulate
petrol prices in a deregulated market, it has a statutory responsibility to
protect consumers from exploitative business practices.
“To be clear, the Commission does not regulate or approve
petroleum prices in a deregulated downstream market,” Bello was quoted as
saying.
“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.”
The FCCPC boss said 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.
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.
Brent crude, the global oil benchmark, dropped to $72.97 per
barrel as at June 26 — its lowest since February, when the conflict began.
On June 25, the Dangote refinery cut its petrol ex-gantry
price to N1,125/litre from N1,175.
The United States President Donald Trump recently accused US
oil firms of petrol price gouging, directing the department of justice (DOJ) to
immediately probe oil marketing companies in the country.
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