- Commission condemns potential consumer exploitation
BY CHINYERE OBIORA – The Federal Competition and Consumer Protection Commission (FCCPC) has issued a stern warning to Nigeria’s downstream operators, threatening sanctions over potential consumer exploitation.
The Commission’s decision to raise concerns over what it described as possible unfair and manipulative power of marketers over the buyers follows the failure of pump prices to drop proportionately with a sharp, historic global crash in crude oil costs.
According to the FCCPC, its current market surveillance reveals a stark double standard because while local refiners, marketers, and depot owners instantly hike fuel prices the moment international crude goes up, they have only implemented marginal, token reductions as costs plunge across the globe.
A statement released on Sunday by FCCPC’s Director of Corporate Affairs, Ondaje Ijagwu, said current retail and gantry prices mean everyday consumers are still being denied the full benefits of easing international oil prices, describing it as an “unfair, deceptive and exploitative business practices.”
The statement read thus: “The Federal Competition and Consumer Protection Commission has expressed concern over findings from an ongoing surveillance of the downstream petroleum market suggesting undue exploitation of consumers.
“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.”
The statement quoted the Commission’s Executive Vice Chairman and Chief Executive Officer, Tunji Bello, as saying that they were worried by what appeared to be a one-sided response to changes in crude oil prices, noting that downstream operators quickly raise pump prices when crude oil spikes, but rarely lower them when prices drop.
He said, “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.”
Warning that deregulation does not absolve businesses of the responsibility to compete fairly or respect consumer rights, Bello said the Commission will investigate and sanction any company found engaging in anti-competitive conduct, consumer exploitation or any practice that violates the Federal Competition and Consumer Protection Act.
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”, urging Nigerians to continue reporting suspected price manipulation, anti-competitive practices and other unfair market behaviour through the Commission’s official complaint channels.
The FCCPC’s warning is coming just days after the Dangote Refinery reduced its ex-depot petrol price from ₦1,175 to ₦1,125 per litre, following the continued decline in international crude oil prices. Brent crude, the global oil benchmark, recently fell to about 72.97 dollars per barrel, its lowest level since February.
