The Federal Government has called out the major stakeholders in the petroleum sector over the continued astronomical cost of products, saying there was no reason for it to remain so given the latest development on the global space.
Short of accusing the big players like the Dangote Refinery, the only company refining Premium Motor Spirit (PMS) in Nigeria, and the Nigerian National Petroleum Company Limited (NNPCL), of playing the modern day shylock on vulnerable Nigerians, the government, through the Competition and Consumer Protection Commission (FCCPC) warned against exploitation.
Explaining that the current petrol pump prices did not match the global crude cost reduction, the agency said in a statement on Sunday, that findings from its ongoing surveillance of the downstream petroleum market suggested undue exploitation of consumers.
Basing its report on the review of the gantry prices of local refiners, marketers, depot operators, and retail outlet operators, which revealed “token reductions” in prices that were not commensurate with the steep fall in crude prices in the global market, it maintained that the current ceasefire accord between the United States (US) and Iran two weeks ago and the reopening of the Straits of Hormuz, had led to a crash in crude prices to $73, from the peak of $120 per barrel in April.
The statement, said: “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.”
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. 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.