The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has raised concerns about Dangote Refinery's influence on petrol pricing, accusing it of attempting to monopolize Nigeria's downstream petroleum market. PETROAN asserts that the refinery’s pricing strategy is designed to stifle competition, limit market options, and ultimately increase prices for consumers.
Dangote Refinery recently announced its petrol prices, setting them at N990 per litre for truck sales and N960 per litre for ship sales, arguing that these prices align with international standards. However, PETROAN and the Independent Petroleum Marketers Association of Nigeria (IPMAN) have stated that they could offer petrol at lower rates, disputing Dangote’s claim that only substandard products could be priced below their own.
PETROAN, through spokesperson Joseph Obele, criticized Dangote Refinery’s pricing as a gimmick meant to preserve a monopoly. They argue that healthy competition in the market benefits consumers, delivering better value through competitive pricing.
In response to Dangote’s claims, PETROAN revealed that it has partnered with international refineries and financial institutions to import top quality petrol at a price far below the current market rate. The association plans to make this fuel available by December 2024, pending regulatory approvals and access to foreign exchange from the Central Bank of Nigeria at the official rate.
Obele emphasized that competitive pricing drives innovation and fairness, while a monopoly leads to exploitation and inflated prices. PETROAN underscored that Dangote’s pricing failed to account for the substantial government concessions the refinery received, especially in foreign exchange, during its construction.
In their defense, PETROAN noted that Dangote’s accusations of importing substandard products are unfounded. They believe these allegations are merely an attempt to discredit other players in the market and suppress competition. PETROAN also highlighted past instances where Dangote criticized the Nigerian National Petroleum Corporation (NNPC) for allegedly importing inferior products, furthering their argument that Dangote aims to dominate the market.
Moreover, PETROAN expressed disappointment over the sudden surge in diesel prices following Dangote Refinery’s entry into the market. Diesel prices jumped from less than N800 per litre to over N1,000, raising questions about whether Dangote’s presence is driving up rather than stabilizing costs.
As an advocate for fair market practices, PETROAN commended President Bola Tinubu’s commitment to rehabilitating Nigeria’s refineries. They called for the immediate privatization of the Port Harcourt and Warri refineries post rehabilitation, suggesting that government refineries should be managed by reputable firms in partnership with industry stakeholders, including PETROAN.
Drawing on business theories, PETROAN warns against the red ocean strategy, where a dominant player forces competitors out to monopolize a market. They believe that fostering a competitive inclusive market benefits all stakeholders, with the market leader coexisting alongside challengers and smaller players, thus creating a balanced environment.
To address ongoing issues in the downstream sector, PETROAN recommends an all inclusive stakeholders’ meeting, bringing together industry bodies such as DAPPMAN, MEMAN, IPMAN, NUPENG, and PENGASSAN. Such a meeting, they argue, would generate valuable insights from industry experts, paving the way for sustainable pricing solutions that ensure fairness and affordability for Nigerian consumers.
PETROAN’s stance reflects a broader call for fairness, transparency, and competition within Nigeria’s oil and gas sector. As Dangote Refinery continues to expand its influence, PETROAN and other industry players advocate for a level playing field that prevents monopolistic practices. Through competition, PETROAN believes the downstream sector can achieve price stability, quality assurance, and a better deal for Nigerian consumers.