The Petroleum Products Retail Outlets Owners Association of Nigeria, PETROAN, on Monday raised concerns over Dangote Refinery’s plan to begin direct nationwide distribution of petrol and diesel.
In a statement issued by PETROAN’s spokesperson, Mr. Joseph Obele, the association warned that the move could have serious implications for the country’s downstream petroleum sector warning that consequences include widespread job losses and the closure of small businesses.
The News Agency of Nigeria recalls that on June 15, Dangote Refinery announced its intention to distribute petrol and diesel directly to consumers across Nigeria.
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Reacting to the announcement, PETROAN National President, Dr. Billy Gillis-Harry, said the strategy could lead to a monopolistic market structure, stifling competition and threatening thousands of jobs.
“With a production capacity of 650,000 barrels per day, Dangote Refinery should be aiming to compete with global refiners, not engaging in direct distribution within Nigeria’s downstream sector,” Gillis-Harry stated.
He explained that this approach undermines the viability of independent marketers, truck owners, filling station operators, and modular refinery businesses that depend on the current supply chain.
Gillis-Harry warned that Dangote’s dominance could result in higher fuel prices due to diminished competition and widespread business closures within the fuel retail market.
He also noted that the planned deployment of 4,000 Compressed Natural Gas, CNG, powered tankers by Dangote, which could reduce transportation costs, threatens the livelihoods of traditional tanker drivers and owners.
“Filling station operators, truck owners, telecom diesel suppliers, and modular refineries are all at risk,” he said. “Dangote’s strategy appears to be a pricing penetration tactic aimed at capturing market share and eliminating competitors.”
Gillis-Harry further expressed concern that Dangote’s market power could enable price-setting practices that may not favor consumers, citing similar trends in other sectors where the conglomerate operates.
He called on the Executive Director of the Nigerian Midstream and Downstream Petroleum Regulatory Authority and the Minister of State for Petroleum Resources to urgently implement price control mechanisms and enforce fair competition laws.
“Protecting and promoting competition is essential to safeguard consumers, preserve jobs, and ensure a balanced petroleum distribution ecosystem,” Gillis-Harry concluded.
NAN
