PETROAN challenges Dangote Refinery’s N990/litre price, urging competition in Nigeria’s fuel market to ensure fair pricing for consumers.
[dropcap]T[/dropcap]he Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has criticised the Dangote Petroleum Refinery’s recent petrol pricing of N990 per litre, claiming that the rate is “inconsiderate” given the numerous government concessions granted to the refinery during its construction.
PETROAN contends that the Dangote Refinery, which recently revealed this price point, is disregarding its favourable exchange rates and concessions, which should have allowed for more competitive pricing.
Also read: Dangote urges marketers to source petrol directly from his refinery
Major petrol marketers report that the landing cost of imported petrol as of 31 October 2024 was N978 per litre, which they argue is cheaper than Dangote’s N990 rate.
PETROAN Publicity Secretary, Joseph Obele, insisted that PETROAN’s own proposed import strategy would enable them to sell fuel at lower rates, should they be granted an import licence by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Obele stated that PETROAN has established a strategic business unit called PETROL to import and supply high-quality fuel products.
He argued that increased competition in the downstream sector would benefit Nigerian consumers and reduce prices.
“When competition is at its peak, consumers get the best value,” Obele asserted, adding that “a monopolistic market will only drive prices higher and exploit consumers.”
Tensions escalated after Dangote Refinery accused PETROAN and the Independent Petroleum Marketers Association of Nigeria (IPMAN) of planning to import substandard fuel.
Obele refuted these allegations, stating, “The publication by Dangote Refinery about PETROAN importing substandard products is simply a tactic to maintain a monopoly.”
He reiterated PETROAN’s commitment to importing quality fuel and its readiness to enter the market by December 2024, pending the necessary permits and access to foreign exchange at official rates.
PETROAN’s response also highlighted that Dangote Refinery delayed announcing its petrol price until PETROAN and IPMAN confirmed plans to sell at lower rates.
The association argued that Dangote’s pricing strategy is influenced by international market rates rather than the actual production costs, despite Nigeria’s government reportedly granting Dangote extensive financial benefits.
“Goods from Chinese markets aren’t priced like those from the American market, as production costs differ,” Obele explained, arguing that Dangote should base its prices on production costs rather than international benchmarks.
He added that recent allegations of PETROAN importing inferior products, along with rumours about IPMAN establishing a blending plant in Lagos, were attempts by Dangote to sideline competitors and control the Nigerian fuel market.
The Dangote Group spokesperson, Anthony Chiejina, had recently claimed that an international trading company intended to use a depot near Dangote Refinery to “blend substandard products.”
However, IPMAN National Secretary Terlumun James denied the existence of any such blending plant, emphasising the need for stakeholder unity to provide affordable energy to Nigerians.
James commented, “The common man is suffering, and we all need to come together to address this issue.”
In a show of support for President Bola Tinubu’s commitment to revitalising Nigeria’s refineries, PETROAN praised the ongoing rehabilitation of state-owned facilities, including those in Port Harcourt and Warri.
The association called for the eventual privatisation of these plants, recommending that reputable firms with the necessary technical, managerial, and financial capacities take charge, in partnership with PETROAN and other stakeholders, to create a balanced and competitive market.
PETROAN further stressed that a fair market should accommodate various players, allowing the market leader to coexist with challengers and providing consumers with affordable options.
Obele said, “The Federal Government should dismantle any attempt at creating a monopoly in the downstream sector. PETROAN will fully support efforts to foster competition, which is essential to lowering the current petrol price.”
