The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has raised serious concerns over Dangote Refinery's announcement to begin direct distribution of premium motor spirit (petrol) and automotive gas oil (diesel) nationwide.
PETROAN spokesperson, Joseph Obele, issued a statement on Monday warning that this development could lead to a "monopoly in disguise" and pose a significant threat to thousands of jobs in Nigeria's downstream petroleum sector.
The statement comes in response to Dangote Refinery's Sunday announcement of plans to commence direct distribution of petroleum products across the country.
Concerns Over Market Dominance
PETROAN argues that with a production capacity of 650,000 barrels per day, Dangote Refinery should focus on competing with global refineries rather than operating as a distributor in the downstream sector.
"PETROAN has previously raised alarms about Dangote's intentions to dominate the downstream sector, citing concerns that the company may leverage its market power to fix prices, limit competition, and exploit consumers, much like it has done in other sectors," the statement noted.
The association warned that Dangote might employ a pricing penetration strategy—reducing prices initially to capture market share—with the ultimate goal of forcing other filling station operators out of business.
Threat to Transportation Sector
Another major concern highlighted by PETROAN is Dangote Refinery's introduction of 4,000 brand-new Compressed Natural Gas (CNG)-powered tankers. While these vehicles may offer lower transportation costs for petroleum products, the association warns this shift could lead to widespread job losses among existing truck drivers and owners.
"The adoption of a forward integration strategy by Dangote Refinery will greatly affect various stakeholders," PETROAN stated, listing modular refineries, truck owners, filling station operators, local suppliers of petroleum products, and telecom diesel suppliers among those whose businesses may be negatively impacted.
Call for Regulatory Intervention
PETROAN's National President, Dr. Billy Gillis Harry, has called on the Executive Director of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Minister of State for Petroleum to implement price control mechanisms to prevent any form of monopoly.
"It is obvious that Dangote plans to gain a full monopoly of the downstream sector, which would enable the company to exploit Nigeria's petroleum consumers," the statement reads.
Dr. Harry emphasized that competition should always be encouraged to protect consumers and promote economic efficiency in the petroleum sector.
The Dangote Refinery, one of the largest in sub-Saharan Africa, was expected to satisfy domestic fuel demand and export surplus products, potentially transforming Nigeria from a fuel importer to an exporter.
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