The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has accused Dangote Refinery of attempting to suppress competition in the downstream sector.

PETROAN’s accusation follows Dangote Refinery’s recent statement that marketers criticising its petrol prices only sought to import lower-quality products at reduced prices.

According to Channels TV, Dangote Refinery disclosed on Sunday that it sells petrol at ₦990 per litre for truck sales and ₦960 per litre for ships, aligning its pricing with international market rates.

Dangote’s statement came in response to comments from PETROAN and the Independent Petroleum Marketers Association of Nigeria (IPMAN), who asserted that they could procure petrol at rates below Dangote’s.

In a Monday statement signed by spokesperson Joseph Obele, PETROAN rebuffed Dangote’s claims of inferior imports, calling it a “familiar ploy to maintain monopoly.”

PETROAN asserted that consumers benefit from fair pricing when competition thrives and cautioned that a monopolised market would only exploit consumers.

The association further announced its intentions to import premium-grade PMS with the help of foreign refinery partners, aiming to offer lower prices than currently available. PETROAN is seeking regulatory approval and access to foreign exchange at official rates from the Central Bank of Nigeria and aims to enter the market by December 2024.

Obele’s statement noted that Dangote’s petrol prices were undisclosed until PETROAN and IPMAN revealed plans to sell at lower rates. PETROAN expressed concerns that Dangote’s price of ₦990 per litre is excessive, especially given the refinery’s access to favourable foreign exchange rates during its construction.

“The primary factor in setting a price should be production cost, with a fair margin added,” PETROAN argued, criticising Dangote’s approach of benchmarking against international prices despite concessions from Nigeria.

The statement also condemned Dangote’s allegations that PETROAN would import inferior products and that an international firm intended to establish a PMS blending plant in Lagos, describing these as tactics to monopolise the market.

Recently, Dangote’s CEO claimed that the Nigerian National Petroleum Company (NNPC) was importing subpar products and dismissed the Malta refinery as merely a blending facility. PETROAN argued that these statements were meant to discourage competition and achieve a market monopoly.

Further, the association highlighted a recent spike in diesel prices, which rose above ₦1,000 per litre following Dangote’s entry into the diesel market, despite diesel being deregulated and previously available for under ₦800.

PETROAN praised President Tinubu for his commitment to rehabilitating Nigeria’s state-owned refineries, noting that funding has remained consistent under his administration. The association urged that the rehabilitated Port Harcourt and Warri refineries be privatised and managed by technically and financially capable firms, in collaboration with PETROAN and other stakeholders.

PETROAN proposed a model similar to Indorama Petrochemicals, advocating for a transparent privatisation process to avoid Maintenance, Repair, and Operations (MRO) contracts, which experts have criticised as a “red ocean strategy” that stifles competition.

The association urged the government to prevent monopolistic practices in the downstream sector and foster competition as a means of reducing petrol prices. PETROAN expressed support for President Tinubu’s reformative efforts, encouraging an all-inclusive market to stabilise the sector’s pricing.

To address the ongoing price instability, PETROAN recommended an inclusive stakeholders’ meeting with DAPPMAN, MEMAN, PETROAN, IPMAN, NUPENG, and PENGASSAN to gather valuable insights from industry participants.