FCCPC warns fuel marketers against profiteering, threatens sanctions

The Federal Competition and Consumer Protection Commission (FCCPC) has warned fuel marketers, depot operators, and other players in the downstream petroleum sector against profiteering, saying it will sanction any operator found exploiting consumers despite the recent decline in global crude oil prices.

The Commission expressed concern over findings from its ongoing surveillance of the downstream petroleum market, which suggest that consumers are not benefiting from the significant drop in international crude oil prices.

In a statement issued on Sunday, the FCCPC said its review of the gantry prices of local refiners, marketers, depot operators, and retail outlets showed only marginal reductions that do not reflect the sharp decline in crude oil prices on the international market.

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The statement, signed by the Commission’s Director of Corporate Affairs, Ondaje Ijagwu, quoted the Executive Vice Chairman and Chief Executive Officer of the FCCPC, Mr. Tunji Bello, as saying that while the Commission does not regulate petroleum prices in a deregulated market, it has a statutory duty to ensure fair competition and protect consumers from exploitative practices.

“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 expressed concern that marketers often increase pump prices immediately whenever crude oil prices rise, but are slow to reduce prices when the global market moves in the opposite direction.

“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 added.

According to the Commission, crude oil prices have fallen to about $73 per barrel following the ceasefire agreement between the United States and Iran and the reopening of the Strait of Hormuz, compared with a peak of about $120 per barrel recorded in April.

It recalled that the earlier surge in crude prices prompted local refiners and marketers to increase petrol prices to between N1,350 and N1,500 per litre, while diesel sold for about N2,000 per litre during the period of heightened tensions.

The Commission noted that although Premium Motor Spirit (PMS) sold for between N800 and N900 per litre in February, the product is still being sold at an average of N1,200 per litre across the country, despite some local refiners fixing gantry prices between N1,025 and N1,075 per litre.

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 have translated into lower prices for consumers.

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.

He urged consumers to report suspected anti-competitive practices, misleading pricing, and other unfair market conduct through the Commission’s established complaint channels.