PETROAN Accuses Dangote Refinery of Monopolistic Practices, Promises Cheaper Petrol

2 weeks ago 15

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has sharply criticized Dangote Refinery for alleged attempts to stifle competition and maintain a monopoly in Nigeria’s downstream sector.

The accusation follows Dangote Refinery’s defense of its petrol pricing and its recent claims that critics of its prices were pushing to import substandard fuel.

In a statement issued on Monday, PETROAN responded to Dangote Refinery’s Sunday release in which it clarified its petrol prices: N990 per liter for truck delivery and N960 per liter for ship loading, aligning them with global market rates.

Dangote Refinery had suggested that any petrol offered at lower prices could be of inferior quality.

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However, PETROAN, led by spokesperson Joseph Obele, dismissed these remarks, calling them part of a broader strategy to suppress competition and preserve Dangote’s dominance in the market.

“Contrary to Dangote’s claims, consumers stand to benefit from healthy competition, which drives down prices and ensures quality. The market must remain competitive to avoid exploitation and ensure fair pricing for all Nigerians,” PETROAN’s statement read.

PETROAN went on to argue that Dangote’s pricing approach was unfair, particularly given the substantial concessions the refinery received in foreign exchange access during its construction.

The association emphasized that the cost of production, rather than international market rates, should be the key determinant for setting petrol prices in Nigeria.

“Goods produced in different regions have different costs based on local factors like production methods and subsidies.

The international market is not the sole reference for setting prices in Nigeria, especially considering the unique circumstances of Dangote Refinery,” the statement continued.

In response to Dangote’s pricing, PETROAN revealed that it had secured partnerships with foreign refineries and financial backers to import high-quality petrol at rates significantly lower than the current N990 per liter.

The association announced plans to enter the Nigerian market before December 2024, pending regulatory approvals. PETROAN’s move is aimed at offering an alternative to Dangote’s pricing model, which it described as “exploitative.”

“PETROAN is ready to offer Nigerians cheaper petrol, sourced from reputable foreign refineries, without compromising on quality. We are committed to providing an affordable and competitive alternative to the current pricing structure,” said Obele.

The association also criticized Dangote Refinery for alleging that PETROAN’s imported fuel would be substandard, a claim PETROAN dismissed as part of a long-standing tactic to eliminate competition.

It further pointed to a pattern where Dangote had previously criticized other entities like the NNPC for selling inferior products, a strategy PETROAN claimed was designed to push other market players out.

Also, PETROAN called for the privatization of Nigeria’s state-owned refineries, including the Port Harcourt and Warri facilities, after their ongoing rehabilitation. The association argued that privatization, along with competition, would ensure that the downstream sector remains dynamic and consumer-focused.

PETROAN called on the Federal Government to actively support the promotion of competition in the downstream sector to drive prices down. The association urged President Bola Tinubu to facilitate a stakeholder meeting, including representatives from DAPPMAN, MEMAN, IPMAN, and other key players, to find lasting solutions to the pricing instability in the sector.

“Monopolistic practices are harmful to consumers and the economy. We urge the government to dismantle any barriers to competition and create a fair playing field for all market participants,” PETROAN emphasized.