The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) criticized the Dangote Petroleum Refinery for selling petrol at N990 per litre, calling it inconsiderate given the concessions the refinery received during construction.
PETROAN argued that imported petrol is cheaper than Dangote’s selling price, citing a landing cost of N978 per litre for imported petrol as of October 31, 2024. In response to PETROAN’s criticism, the Dangote refinery accused PETROAN and the Independent Petroleum Marketers Association of Nigeria of planning to import substandard petroleum products.
PETROAN’s Publicity Secretary, Joseph Obele, stated that they could sell petrol at rates significantly lower than N990 per litre if granted an import license by the Nigerian Midstream and Downstream Petroleum Regulatory Authority. The ongoing dispute highlights tensions in the Nigerian petroleum market regarding pricing and product quality.
PETROAN has established a strategic business unit called PETROL to address challenges in the downstream petroleum sector. The association emphasizes a solution-centric and patriotic approach to tackle pricing instability in the industry.
PETROAN criticizes President Bola Tinubu’s reformative agendas, viewing them as detrimental to those who advocate for or benefit from a monopolistic market. The association believes that heightened competition leads to better pricing and value for consumers.
PETROAN warns that a lack of competition results in an exploitative market focused solely on profiteering. PETROAN claims that Dangote refinery’s accusation of importing substandard petroleum products is a tactic to maintain its monopoly in the market.
The statement from Dangote refinery followed PETROAN and IPMAN’s announcement to sell petrol at lower prices than the current market rate, which had not been disclosed prior.
PETROAN plans to collaborate with foreign refineries to import high-quality petrol and sell it at prices lower than the current market rate, pending regulatory approval and access to foreign exchange. The association criticizes Dangote’s price of N990 per litre as inconsiderate, arguing that the refinery benefitted from significant concessions for foreign exchange during its construction.
Obele asserts that petrol pricing should be based on production costs plus a reasonable margin, rather than on international market rates, especially given the concessions received by Dangote refinery.
PETROAN claims that goods from Chinese markets are generally cheaper than those from American markets due to differences in production costs. Allegations regarding PETROAN’s intention to import inferior products are viewed as tactics by Dangote refinery to undermine competition and maintain market dominance.
The suggestion that an international company plans to establish a petrol blending plant in Lagos is also seen as part of Dangote’s strategy to eliminate rivals. PETROAN argues that these claims are aimed at fostering a monopoly that would exploit consumers.
The association emphasizes the need for competition in the market to ensure fair pricing and quality products for consumers.
PETROAN criticizes the CEO of Dangote refinery for previously alleging that NNPC LTD imported inferior petroleum products, suggesting these claims are part of a strategy to eliminate competition and establish a monopoly. The association commended President Tinubu for his support in revitalizing state-owned refineries, noting that the ongoing rehabilitation has not faced funding issues.
PETROAN advocates for the immediate privatization of the Port Harcourt and Warri refineries, recommending that they be transferred to reputable firms with technical and managerial expertise in collaboration with PETROAN. This privatization is seen as essential for ensuring that government-owned refineries can compete effectively against monopolistic operators.
PETROAN calls for a transparent privatization process, using Indorama Petrochemicals as a model, to prevent the suffocation of competition and protect other business owners in the sector.
PETROAN emphasizes the need for a balanced market where a market leader coexists with challengers and followers, urging the government to dismantle monopolistic practices in the downstream sector to enable fair competition and lower PMS prices.
The association expresses its commitment to support the Federal Government in fostering intense competition in the petroleum sector, which they believe is essential for reducing fuel prices.
Terlumun James, National Secretary of IPMAN, denies the existence of a blending plant in Lagos, urging stakeholders to unite for the benefit of consumers and address the energy crisis in Nigeria.
IPMAN is in ongoing discussions with Dangote to secure lifting rights from the $20 billion refinery, indicating collaboration between the organizations to enhance fuel supply.
Dangote Group’s spokesperson alleges that an international trading company plans to use a depot next to the Dangote refinery to blend substandard products, which could threaten the market with lower-quality fuel competing against Dangote’s products.
Peoplesmind
