Fuel Price Increase: PETROAN Accuses Dangote Of Monopolistic Practices And Anti-Competitive Behavior

Fuel Price Increase: PETROAN Accuses Dangote Of Monopolistic Practices And Anti-Competitive Behavior

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has accused Dangote Refinery of attempting to suppress competition in the downstream petroleum sector. This accusation follows Dangote Refinery’s assertion that marketers are criticizing its petrol prices in an effort to import cheaper, potentially lower-quality fuels.

According to reports from Naija News, Dangote Refinery stated on Sunday that its petrol prices are set at N990 per liter for truck deliveries and N960 per liter for ship loading, which they claim aligns with international market rates. This clarification came after PETROAN and the Independent Petroleum Marketers Association of Nigeria (IPMAN) suggested they could procure petrol at lower prices than those offered by Dangote.

In response to these claims, Dangote Refinery argued that only substandard products could be sold at prices below theirs. However, in a statement issued on Monday, PETROAN spokesperson Joseph Obele contended that Dangote’s allegations of substandard imports are merely a tactic to maintain monopolistic control over the market.

PETROAN emphasized the benefits of competition for consumers and advocated for a market environment that promotes fair pricing and prevents exploitative practices. The association announced that it has finalized partnerships with foreign refinery operators and financial backers to import high-quality Premium Motor Spirit (PMS) at prices significantly lower than current Nigerian rates.

In their statement, PETROAN highlighted the establishment of a Strategic Business Unit called PETROL, aimed at addressing the pricing instability and challenges in the downstream sector. They noted, “The reformative and transformational agendas of the President are seen as threatening to those who benefit from monopolistic markets. The President’s interventions are intended to liberalize the downstream sector and foster an inclusive market.”

They further asserted, “Intensive competition in any market delivers the best value for consumers. In contrast, a lack of competition leads to exploitation and profiteering. Dangote Refinery’s claims that PETROAN intends to import inferior products are not surprising to stakeholders, as this has become a common tactic to maintain monopoly.”

PETROAN clarified that they have never compared their prices to Dangote’s, as the refinery had not disclosed its pricing until the recent press release. The association is set to enter the market before December 2024, pending regulatory approval for their import permit and access to foreign exchange from the Central Bank of Nigeria (CBN) at the official rate.

Previously, Dangote Refinery had not publicly revealed its petrol prices until PETROAN and IPMAN announced their intention to sell at lower rates. PETROAN criticized the announced price of N990 as unreasonable, especially considering Dangote’s substantial concessions on foreign exchange during the refinery’s construction.

They argued that the pricing of petrol should be based on production costs plus a fair margin, rather than being tied to international market rates. “Goods from China are not priced the same as those from America due to differing production costs,” they noted.

Furthermore, PETROAN claimed that Dangote’s allegations about importing inferior products and the establishment of an international PMS blending plant in Lagos are strategic moves to eliminate competition and secure monopolistic control for exploitative purposes.