Only the president has powers to regulate price – Irukera

Babatunde Irukera is the Executive Vice-Chairman/Chief Executive Officer of the Federal Competition and Consumer Protection Commission (FCCPC). In this interview with Daily Trust, he touched on recent developments around the commission and the expectation that the commission has the powers to regulate the prices of goods and services.  Excerpts:

Recently, you engaged in the raid of offices of some loan shark companies, what else can you tell us other than the media hype?

Yes, on the day we conducted the raid, we had some information about some bank accounts. So, pursuant to the order of search and seizure we obtained from a federal high court, we also wrote to some banks to block certain accounts as well as Google PlayStore and Apple App store to take down certain applications that we already know.

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We are engaging with Google, which is in the process, to take down the application identified.

All bank accounts provided were immediately blocked but some of the companies were having multiple bank accounts in multiple banks. Between the raid and now, we have discovered an addition of more than 30 accounts and they have all been frozen and we are continuing to freeze more accounts as we discover them.

I am pretty certain that the course of action we have taken and the media engagements are yielding results. We have seen three of the major ones, who have come forward because their expenses have been severely affected by either our search or the account seizure.

But some of them are still operating. Does it mean that the raid did not hit them hard?

The intervention is working, but it is one of those things where the air in a balloon is so much and it takes time for it to dissipate.  I am very confident today that when we proceed, we will get the full result.

There is also the talk about engaging airlines as regards their hike in airfare. What have you done so far?

We met with the airlines and the reality of it is that we are a market regulator and it is only in limited circumstances that FCCPC is provided the power to regulate price.

However, this power to effect this price regulation doesn’t sit with the commission’s law but in limited circumstances upon clear market research and compelling need in certain sectors to make recommendations on price adjustment. As such, the FCCPC may provide that research and recommendations to the president. It is the president who will approve for the price to be imposed or be regulated and it must be gazetted and for a short period of time stating how it will be implemented.

The law states that the purpose of that regulation must be to promote competition or in a market where there is no competition and you need to regulate prices for a short period of time.

It is important to say that we don’t regulate price just because of numbers, there are provisions that say that price gouging, exploitation, unreasonably, manifestly unjust terms including price are wrong. But determining that the price is exploitative or unjust is not just in number, a bunch of circumstances come into play.

For instance, when we investigated a pharmacy, we were able to come to the conclusion that something that was sold for N490 in the morning, by the end of that same day went for N3,400 and we were able to see why because it was a case after COVID was discovered in Nigeria and this is something that contributes to inflation. We took advantage of the situation and we were able to look at the business, what is their profit regular margin, if the margin is 40 per cent or 20, the moment you start selling where the margin becomes 300 per cent then something must be wrong.

However, what we could say to the airlines is that the most important mechanism for determining what is the right price is competition. It is so fair if an airline decides to set its price at N300,000 and another person puts it at 45,000, the market will decide what the fair should be but when you get together and decide that this is the fair, it doesn’t matter whether it is excessive or insufficient, it is not the fair market price.

That agreement or coordinated conduct has distracted the market and it is no longer free. What we sought to do was to correct the market.

We have had meetings and there are circumstances that have been taken to consider the new price like the process of increase in the price of jet fuel. But they are collaborating now to understand what the situation is and they agreed that they can’t be sitting together to discuss the price, that can’t work.

One of the things we discussed was a transparent mechanism where passengers can be carried along with what is changing. For instance, you set your fare through a transparent variable passenger fuel surcharge, which moves based on what is happening in the fuel market. If the price of fuel comes down, the surcharge comes down or becomes eliminated. When it goes up, it is measured to enable it to manage the spike and can be a framework. But because all of them buy the fuel at the same price, it will address each person on the way his business is done.

Does the commission have any kind of platform that allows consumers to make complaints without bureaucratic bottlenecks?

We have tried to make sure that complaints come to us directly to address them timely. That was one of the first assignments when I assumed office.

Before now, we had an email address where the messages sent by consumers were not going into the server directly but it was upgraded with a brand new complete system in which you can file your complaint and immediately it generates a unique case ID.

Consumers can also go to either Google Play Store or Apple App Store to download our app in filing a complaint and there is a way to monitor it.

Are we resolving more complaints? No, but, are we receiving far more complaints? Yes. I must say that we are receiving more complaints and it is not because we are failing in our work but we are succeeding in aggregating the complaints.

We are generating thousands on a weekly basis and we are resolving far more. The next level of it is in the pilot stage, which is when we will set the system to be robust enough to be that at the end of the day. FCCPC will not be a customer service desk, we shouldn’t be solving complaints. Honestly, it is the people who provide the service themselves that should have feedback mechanisms to resolve complaints. What I said to companies is that the federal government is subsidising their business, they don’t like to hear it but that is the truth.

Our complaints resolution team has become a multi-company customer service desk and the reason they are coming to us more is that they can’t find the people who are supposed to do it.

There is no standalone, clear, accessible, well publicised, resolution platform by these companies for people to reach back to them. What we are trying to do is that if there is no feedback mechanism for the companies there will be a penalty.

At the final stage of our own complaint resolution platform, what we have done is to create a plugging system. With you plugging in when our system recognises any complaints that are for a particular company, it pushes them out to the company immediately. It is now your obligation to resolve it and we will see it on our dashboard to know whether you are resolving it or not.

The idea is that the companies be put on a paid subscription basis since we have created what they should have. The federal government should not be the one creating customer service for companies. So, we will make them pay a subscription to hook up and when they do not resolve complaints on our dashboard, we will become a secondary complaint resolution mechanism and make them pay the cost or prosecute them.