PETROLEUM Products Retail Outlets Owners Association of Nigeria (PETROAN) on Monday raised alarm over the plan by Dangote Refinery to start direct nationwide distribution of petrol and diesel.
In a statement issued on Monday, PETROAN spokesperson, Mr Joseph Obele, said the move by Dangote could have consequences on the country’s downstream sector,
According to him, such consequences include widespread job losses and the shutdown of small businesses.
The News Agency of Nigeria (NAN) recalls that on June 15, Dangote Refinery disclosed its plan to distribute petrol and diesel directly to consumers across Nigeria.
Reacting to this development, PETROAN National President, Dr Billy Gillis-Harry, warned that such strategy could create a monopolistic market structure, stifling competition and threatening thousands of livelihoods in the sector.
“With a production capacity of 650,000 barrels per day, Dangote Refinery should be positioning itself to compete with global refiners rather than engaging in direct distribution within Nigeria’s downstream sector,” Gillis-Harry said.
He stated that this move undermines the survival of independent marketers, truck owners, filling station operators, and modular refinery operators who rely on the existing supply chain structure.
Gillis-Harry noted that Dangote’s dominance could lead to higher fuel prices due to reduced competition and business closures across the fuel retail landscape.
The president said that the situation could also lead to massive job losses among truck drivers, petroleum product suppliers, and station operators
He cautioned that the introduction of 4,000 new Compressed Natural Gas (CNG)-powered tankers by Dangote, which might lower transportation costs, could pose a threat to the jobs of traditional tanker drivers and owners.
“Filling station operators, truck owners, telecom diesel suppliers, and modular refineries are all at risk.
“Dangote’s approach could trigger a pricing penetration strategy aimed at capturing market share and forcing competitors out of the market,” Gillis-Harry added
The PETROAN boss said that Dangote’s market influence might allow for price setting that could disadvantage consumers, noting similar patterns in other industries where the conglomerate operates.
Gillis-Harry, therefore, urged the Executive Director of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Minister of State for Petroleum Resources to urgently introduce price control mechanisms and enforce fair competition policies.
“Competition must be protected and encouraged to safeguard consumers, preserve jobs, and maintain a healthy petroleum distribution ecosystem,” he stressed. (NAN)
