PETROAN Criticizes Dangote Refinery’s Petrol Price Too Expensive Than Imported One

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has voiced strong objections to the Dangote Petroleum Refinery’s petrol pricing of N990 per litre, calling the price “inconsiderate” and highlighting the significant government concessions granted to Dangote during the refinery’s construction. PETROAN argues that the N990 per litre rate undermines competitive pricing in Nigeria’s petroleum market, asserting that imported petrol is available at a lower price compare to Dangote refinery petrol price .

According to PETROAN, the landing cost of imported petrol stood at N978 per litre as of October 31, 2024. PETROAN’s Publicity Secretary, Joseph Obele, expressed disappointment in Dangote’s approach, noting that the monopoly held by the refinery restricts competition and choice, ultimately harming Nigerian consumers. “Consumers get the best value when competition is encouraged,” Obele stressed, calling for greater market diversification to prevent exploitative practices.

PETROAN and IPMAN Respond to Monopoly Concerns

In response to allegations by the Dangote Refinery that PETROAN and the Independent Petroleum Marketers Association of Nigeria (IPMAN) planned to import substandard fuel, PETROAN issued a statement denying these claims. Obele clarified that PETROAN’s goal is to provide high-quality petrol at a more competitive price, pending the issuance of an import permit by the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).

Obele emphasized PETROAN’s commitment to quality, stating, “We have concluded arrangements with reputable foreign refineries and financial partners to import premium petrol that will be sold below the current market price.” He added that PETROAN’s entry into the market by December 2024 hinges on regulatory approval and access to foreign exchange at the official rate. IPMAN’s National Secretary, Terlumun James, also denied any plans to establish a “blending plant” for substandard products, reiterating the importance of affordable energy for Nigerians.

Monopolistic Pricing and the Role of Government Regulation

Petroleum Products Retail Outlets Owners Association of Nigeria’s criticism extends to the manner in which the Dangote refinery determines its petrol pricing structure, which it claims is unfairly aligned with global market rates instead of reflecting domestic production costs. Obele pointed out that Dangote received undisclosed concessions for foreign exchange, a benefit not extended to other players in the industry. “A fair pricing model should account for production costs plus a reasonable margin, not international comparisons,” he argued.

The association called for transparency in pricing and warned that Dangote’s monopoly could stifle competition, leading to artificially inflated prices. “Our country must avoid a monopolistic market that exploits consumers. Only through competition can we ensure fair pricing for all Nigerians,” PETROAN advised. The group urged the federal government to encourage a more inclusive market that balances the interests of all stakeholders.

PETROAN Calls for Refinery Privatization and Transparent Regulation

PETROAN commended President Bola Tinubu for his efforts to rehabilitate Nigeria’s refineries and recommended that the Port Harcourt and Warri refinery plants be privatized to ensure they can compete against dominant players like Dangote. The association suggested partnering with private firms possessing the necessary technical expertise and financial capability to manage these facilities efficiently.

Obele emphasized the need for a transparent privatization process, noting that past monopolistic practices have stifled business diversity. PETROAN proposed using Indorama Petrochemicals as a model for privatization, advocating for an all-inclusive market that benefits both consumers and businesses. “A healthy market includes a leader, challengers, and followers, where each can survive and thrive,” PETROAN stated, reiterating its commitment to competitive pricing and support for the government’s broader economic goals.

Government Urged to Ensure Fair Market Practices

Amid growing tensions between Dangote and PETROAN, stakeholders have called on the government to ensure a competitive and transparent petroleum sector that benefits Nigerians. Petroleum Products Retail Outlets Owners Association of Nigeria noted that only through competition can fuel prices stabilize, stressing the need for a regulatory framework that disallows monopolistic behavior. The association pledged its support to the government in achieving this vision and preventing any single operator from dominating the market.

As the debate continues, stakeholders and the Nigerian public are watching closely, hoping for policies that will lead to a fairer and more affordable fuel market. The Tinubu administration’s commitment to rehabilitating and potentially privatizing state-owned refineries is seen as a positive step towards leveling the playing field, but the road ahead may involve more regulatory adjustments to curb monopolistic tendencies in Nigeria’s fuel sector