The Federal Competition and Consumer Protection Commission (FCCPC) says it is concerned that fuel marketers have failed to reduce pump prices in line with the sharp decline in global crude oil prices.
The commission disclosed this in a statement on Sunday following an ongoing surveillance of the downstream petroleum market.
‘Price cuts not commensurate’
The FCCPC said its review of prices charged by refiners, depot operators, marketers and retail outlets showed only marginal reductions despite the fall in crude oil prices.
According to the commission, the reductions do not reflect prevailing market conditions.
‘Competition must work both ways’
Tunji Bello, executive vice-chairman and chief executive officer (CEO) of the FCCPC, said although the commission does not regulate fuel prices, it has a responsibility to protect consumers from exploitative practices.
“To be clear, the Commission does not regulate or approve petroleum prices in a deregulated downstream market,” he said.
“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.”
Says crude prices have fallen sharply
Furthermore, the FCCPC noted that global crude 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.
It recalled that crude prices had peaked at about $120 per barrel in April.
The commission said marketers quickly increased petrol prices during the spike, with pump prices rising to between N1,350 and N1,500 per litre, while diesel sold for about N2,000 per litre.
It added that petrol sold for between N800 and N900 per litre in February but still averages about N1,200 nationwide despite the recent drop in crude prices.
Warns of enforcement action
Meanwhile, Bello said the commission would investigate any credible evidence of anti-competitive conduct or consumer exploitation.
He stressed that market liberalisation does not exempt businesses from complying with consumer protection laws.
“Market liberalisation does not diminish businesses’ obligations to compete fairly or consumers’ right to fair treatment,” he 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 consumers to report suspected anti-competitive practices and misleading pricing through its complaint channels.
