The Executive Vice-Chairman/Chief Executive Officer of the Federal Competition and Consumer Protection Commission (FCCPC), has said that the competitive market is the best market for consumers.
While speaking on ARISE NEWS, Irukera said, “I cannot overemphasize the fact that a competitive market is the best market for consumers. It gives choice, fair price, innovation, and the satisfaction that you’ve gotten what you got at the best possible price.” He explained that the presence of subsidy only encouraged high prices and reduced efficiency, therefore, the removal of subsidy will eventually lead to manufacturers wanting to be more efficient in order to attract more consumers to their business, in turn providing a more competitive market for the players in the oil industry, which will end up leading to better pricing, which will benefit consumers in the end.
“The one thing that is absolutely clear is that the best price of the product is what is negotiated in the market place where all the players are competing very fiercely. Subsidies generally do not promote efficiency; they even support high prices. Essentially, what the government is supporting with the subsidy is businesses, not really so much as the consumers, because there is no incentive for you to be efficient, there is no incentive to get equipment that does better than the ones you have.
“And so once, for instance there is no subsidy, and the operators are not getting together to discuss price, that’s the first thing. When the market works well, it’s so much easier. It’s not about knowing the daily pump price; it’s really about monitoring that businesses are not colluding or are not engaging in inappropriate conduct. And so, for instance, IPMAN (Independent Petroleum Marketers Association of Nigeria) will subtly be under our scrutiny. When they meet, what will they discuss? Are they discussing volumes? Are they discussing commercially sensitive information? Are they signalling to themselves about pricing or not?
“Once that is not the case and all of them are competing, the prices will be fairer, because everybody will want to be efficient, would want the business, and will want to pull out the price that would make them more competitive”
He then said that although the initial removal of the subsidy will have its challenges, the eventual benefits that it will bring will be the best option for all consumers.