*The Federal Competition and Consumer Protection Commission declares the Naira remains Nigeria’s only lawful currency for domestic commercial transactions across the country, cautioning the Dangote Petroleum Refinery it will not hesitate to take appropriate enforcement action regarding credible evidence of anti-competitive conduct, consumer exploitation, or any other contravention of the FCCPA Act
Isola Moses | ConsumerConnect
Sequel to recent reports that the Dangote Petroleum Refinery, in Lagos, is considering pricing petroleum products in the Unitec States (US) Dollars in the domestic oil market, the Federal Competition and Consumer Protection Commission (FCCPC) has declared the Naira, Nigeria’s currency, remains the only lawful currency for commercial transactions across the West African country.
ConsumerConnect reports the market regulatory Commission said the Nigerian Naira is the legal tender, and it so it remains the lawful currency for domestic commercial transactions within the sovereign country.
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Earlier, a top Federal Government official, who craved anonymity due to sensitivity of the matter Sunday, July 19, reportedly, had hinted at certain factors might have made Dangote Refinery to be “unhappy” with the government over the continued issuance of more import licences to some oil marketers despite its comparatively large capacity to refine oil for the domestic market.
The official alleged the Dangote Refinery was dissatisfied with the volume of crude supplied to it by the Nigerian National Petroleum Company Limited (NNPCL) aside from the relatively little volume of the crude purchased in Naira from the state oil company.
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Despite Dangote’s purported claims for resorting to pricing the Premium Motor Spirit (PMS), also called petrol, in Dollars for Nigerian consumers, Mr. Ondaje Ijagwu, Director of Corporate Affairs at FCCPC, in response to enquiries Sunday, July 19, said: “The Commission’s position is clear,” The Punch report said.
Ijagwu stated in clear terms: “The Nigerian Naira is the legal tender in Nigeria and remains the lawful currency for domestic commercial transactions.”
The FCCPC also expressed concerns that the recent decline in international crude oil prices in the past several weeks has not been reflected proportionately in the prices of petrol sold to energy consumers in the country.
He explained: “The FCCPC remains concerned that recent declines in international crude oil prices have not been reflected proportionately in retail petrol prices.
“As the Commission stated in its 28 June public statement, pump prices increased rapidly when crude oil prices rose, yet the subsequent decline in international crude oil prices has not translated into corresponding reductions for consumers.”
The Director of Corporate Affairs of the Commission further explained that the Federal Government, amid recent developments in the global oil market, convened a stakeholders’ meeting involving regulators, refiners, marketers, and other participants in the petroleum industry, following its concerns about continued oil price hikes in the domestic market.
He stated: “The Commission stands by this position, and expects that, within a reasonable period, the benefits of lower international crude oil prices will be reflected in corresponding reductions in pump prices where market conditions justify such adjustments.”
The Commission, however, assured Nigerians: “The FCCPC will continue to monitor developments closely, and will not hesitate to take appropriate enforcement action where there is credible evidence of anti-competitive conduct, consumer exploitation or any other contravention of the Federal Competition and Consumer Protection Act” 2018 by Dangote Refinery, other players in the downstream petroleum sector of the economy.
On rising concerns about fuel price stability
Explaining further the possible effects of dollarisation of PMS sakes to oil marketers in Nigeria on the Foreign Exchange (Forex) market, the top government official, noted earlier, declared: “So, the issue is that Dangote is unhappy about two things; one is that the government gave import permits.
“They issued import permits to some companies while his Refinery is capable.
“So, he was already angry on that level.”
The source equally noted: “Then number two is that the Refinery is saying that it is not getting enough crude oil even from the Nigerian National Petroleum Company Limited.
“The percentage of Naira for crude that they are giving to the facility is not a lot.”
The official further said: “Number one is that the facility is still not getting enough, according to him.
“And number two is that the portion they are selling to him in Naira is still a little. He still has to do most purchases in Dollars. ”
The official stated: “So, the facility (Dangote Refinery) is saying that if the government cannot increase the crude they are giving to him in Naira, the new Dollar pricing template is what he will do. So those are the two issues.”
Bello on FCCPC’s commitment to protecting energy consumers against exploitation, profiteering
The FCCPC recently disclosed that its findings from surveillance of the downstream petroleum market indicated the gantry prices of local refiners, marketers, depot operators and retail outlet operators revealed mere “token reductions” in prices that are not commensurate with the steep fall in crude prices in the global market.
Speaking on the development, Mr. Tunji Bello, Executive Vice-Chairman and Chief Executive Officer (EVC/CEO) of FCCPC, in a statement had 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.”
Bello, however, stated: “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.”
Emphasising the significance of protecting consumers from exploitation in the domestic oil market, the EVC/CEO of the Commission noted: “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.”
Meanwhile, the development has continued to raise fresh concerns over the stability of petrol prices, with the Dangote Refinery’s decision to price its products in Dollars.
Industry observer reportedly said the Dangote’s move is potentially exposing domestic fuel prices to movements in the Forex market once more, according to report.
Additional reporting by Alexander Davis.