Business and Economy
FCCPC Questions Slow Drop in Fuel Prices Despite Crude Crash
The Federal Competition and Consumer Protection Commission (FCCPC) has expressed concern over findings from its ongoing surveillance of the downstream petroleum market, which suggest the undue exploitation of consumers.
In a statement issued by the Director of Corporate Affairs, Mr.
According to the Commission, “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 agreement between the United States and Iran two weeks ago and the reopening of the Strait of Hormuz, crude oil prices have dropped to about $73 per barrel from a peak of $120 recorded in April.
Across the global market, crude prices have since returned to their February levels.
The earlier surge in crude prices prompted local refiners and marketers to increase pump prices nationwide, with petrol selling for between N1,350 and N1,500 per litre, while diesel rose to about N2,000 per litre as tensions escalated in the Gulf between April and May.
In February, the average price of Premium Motor Spirit (PMS), popularly known as petrol, ranged between N800 and N900 per litre.
Currently, PMS is still sold at an average price of N1,200 per litre across the country, while some local refiners have fixed their gantry prices between N1,025 and N1,075 per litre.
While acknowledging that domestic fuel prices are influenced by several commercial and market factors, including refining costs, foreign exchange fluctuations, logistics, financing and distribution expenses, the Commission maintained that competitive market forces should have facilitated the quicker transfer of cost savings 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 also urged 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.
