FCCPC warns petrol marketers over pricing after global crude oil price falls

The Independent Petroleum Marketers Association of Nigeria (IPMAN) has warned that marketers will shut filling stations if the federal government attempts to regulate petrol prices, insisting that the downstream petroleum market is fully deregulated.   Speaking with TheCable on Thursday, Chinedu Ukadike, IPMAN’s national publicity secretary, said the government should focus on ensuring local refineries operate efficiently and encourage competition instead of imposing price controls.   “As I advised, the government should concentrate on ensuring our refineries are working and allow more sources of supply instead of talking about regulation in a deregulated economy. If they do that, marketers will protest and shut down their filling stations,” Ukadike said.   He also said petrol prices would continue to decline in line with market forces, dismissing claims that marketers were profiteering from the recent drop in global crude oil prices.     The spokesperson said competition among marketers would naturally force prices lower, as consumers would patronise outlets offering cheaper products.   “If you sell higher, people will go and buy where it is cheaper. That is one of the forces of demand and supply, which regulates price,” he said.   “So, the issue of whether government wants to regulate price does not arise because the price will regulate itself through the forces of demand and supply.”     Ukadike dismissed allegations that marketers were holding on to expensive stock or profiteering at the expense of consumers.   “So, we don’t have an iota of trying to profiteer in line with the statements that we reacted to. There is no profiteering. There is even no hoarding. That’s the standard principle of monetisation,” he said.   “The more we buy cheaper, the more we sell cheaper.”   The IPMAN spokesperson acknowledged that petrol prices had begun to decline but argued that expectations of a significant reduction overlooked the pricing realities in the supply chain.     He said marketers purchase products based on prevailing depot prices, leaving little room for excessive margins after accounting for transportation and operating costs.   “We don’t have much interest on this. We should be expecting the price to come down gradually,” he said.   Ukadike added that attention should instead be focused on the pricing decisions of refiners.   “They should look at whether the price at which refiners are selling to us corresponds with international crude prices and production costs. If they don’t come out with those variables, they cannot say those buying from refiners are wrong,” he said.     His comments come after the Federal Competition and Consumer Protection Commission (FCCPC) accused marketers of failing to pass on the benefits of lower global crude oil prices to consumers, saying recent reductions in pump prices do not commensurate with the sharp decline in crude prices.   The criticism followed a decline in international oil prices after tensions in the Middle East eased.     Brent crude fell to about $71 per barrel on Monday, after a ceasefire agreement between the United States and Iran reduced concerns over supply disruptions through the Strait of Hormuz.   Also weighing in on the issue, Billy Gillis-Harry, national president of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), urged refiners, depot owners and importers to reduce ex-depot and retail prices to reflect lower crude prices.     According to Gillis-Harry, the development highlights the need for a more competitive downstream petroleum market.   He said the drop in international crude oil prices presents an opportunity for operators in the downstream sector to reduce prices and provide relief for consumers.     Also, Taiwo Oyedele, minister of finance and coordinating minister of the economy, said the federal government is engaging oil marketers and regulators to ensure reductions in global crude oil market prices are reflected more transparently in the pump price of fuel.   However, Oyedele said the government is seeking a balance between protecting consumers and allowing operators in the downstream sector to remain commercially viable.   The minister said marketers are often quick to raise pump prices when crude oil prices increase because of replacement costs, but slower to reduce prices when crude prices fall due to existing inventory.

FCCPC warns petrol marketers to lower prices following the drop in global crude oil, vowing to investigate and sanction any price manipulation in Nigeria's market.

The Federal Competition and Consumer Protection Commission (FCCPC) has warned oil marketers against exploiting consumers, saying the current retail prices of petrol do not reflect the sharp decline in global crude oil prices. The post FCCPC warns oil marketers against profiteering as crude prices fall appeared first on Vanguard News.

 The Federal Competition and Consumer Protection Commission (FCCPC) has warned oil marketers against exploitation, saying the current petrol pump prices do not match the global crude cost reduction.   The FCCPC, in a statement on Sunday, said findings from its ongoing surveillance of the downstream petroleum market suggest undue exploitation of consumers.   The commission said its 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 agency said following a ceasefire accord between the United States (US) and Iran two weeks ago and the reopening of the Straits of Hormuz, crude prices have fallen to $73, a sharp drop from the peak of $120 per barrel in April.     According to the agency, crude prices have since returned to the February levels across the global market.   “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.”   The FCCPC also vowed to sanction profiteers.   ‘CONSUMERS NOT BENEFITING FROM FALLING CRUDE OIL PRICES’ 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,” Bello was quoted as saying.   “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.    

The Federal Competition and Consumer Protection Commission, FCCPC, has warned petrol marketers against unfair petrol pricing. In a statement issued on Sunday by the Director of Corporate Affairs of the Commission, Ondaje Ijagwu, a review of prevailing gantry and retail prices suggested that consumers were yet to fully benefit from the easing in global oil prices The […] ‘Nigerians not benefiting from drop in crude price’ – FCCPC warns petrol marketers