PETROAN Slams Dangote Refinery over Petrol Price of N990/Litre, Accuses Company of Monopolistic Practices

Lagos, Nigeria – November 5, 2024

The PETROAN, while berating Dangote Petroleum Refinery for jacking up the price of petrol from its depot at the rate of N990 per liter, described the pricing as “inconsiderate.” PETROAN stated that the concession on foreign exchange given to Dangote during the construction of the refinery should have been factored into the price of the fuel.

The comments by the association follow a string of events involving the country’s downstream petroleum segment. Speaking during the announcement, PETROAN noted that the price at which petrol is imported was less than the price Dangote is selling to the public. As of October 31, 2024, major marketers said the landing cost of imported petrol was N978 per litre, way cheaper than the N990 per litre price tag set by the Dangote refinery.

In response, Dangote refinery accused PETROAN and IPMAN-Independent Petroleum Marketers Association of Nigeria-of planning to import adulterated fuel into the country. To this, PETROAN strongly denied the accusation. In a statement on Monday, the Publicity Secretary of PETROAN, Joseph Obele, restated that once given an import license by the Nigerian Midstream and Downstream Petroleum Regulatory Authority, NMDPRA, the association was willing to sell fuel cheaper than the existing market prices.

Obele also explained that PETROAN had an incorporated strategic business unit known as PETROL, which would facilitate the importation of premium petroleum products. Consequently, the association said it was targeting to enter the market before December 2024, upon regulatory permission and access to foreign exchange at the official rate.

The N990 per liter price Dangote refinery has pegged is insensitive, considering the monumental concessions the company enjoyed from the beginning of the construction,” Obele argued. He said that fuel products should be priced based on production cost plus a reasonable margin and not on the prevailing global market rates. He also explained that goods produced in countries where production was cheaper, such as China, are usually sold at a lower rate than those in countries with high production costs, such as the U.S.

The association, therefore, described the accusations from wherever that PETROAN would import substandard fuel as a strategy by Dangote to protect its monopoly. Obele berated Dangote for making such a statement as part of his game plan to hijack the Nigerian fuel market. “This is part of Dangote’s strategy to push other players out of the market, ensuring he maintains control and profits at the expense of the consumer,” he said.

Furthermore, PETROAN applauded the determination of President Bola Tinubu in revitalizing the sick refineries across the country with the rehabilitation currently under way at the Port Harcourt and Warri refineries. Hence, the association urged the government to privatize such refineries upon completion through a partnership with PETROAN and other stakeholders that would guarantee competitive market practices.

What we want is a balanced market where there is competition,” Obele said, warning that the government must not yield to any temptation to let Dangote dominate a downstream sector monopoly that will hurt consumers by maintaining fuel prices at unacceptably high levels.

The National Secretary of IPMAN, Terlumun James, while speaking with The PUNCH, responded to the accusations against Dangote of adulterated fuel as “false”. James called for unity among all the stakeholders in the interest of ensuring that Nigerians got fairly priced energy, stressing that any attempt to divide the sector would only work against the common man. The Independent Petroleum Marketers Association of Nigeria, Iwak also revealed that they were already in contact with Dangote Group to start lifting products from the new refinery once their import approvals are given to them.

Head of Corporate Communications, Dangote Group, Anthony Chiejina over the weekend said an international trading company had acquired a depot facility close to the refinery for the purpose of blending poor quality fuel to sell cheaper and undermine the superior quality products of Dangote.

What has happened over time is a continued struggle between PETROAN, Dangote, and IPMAN in the explosive situation of the petroleum sector in Nigeria, given so many actors fighting for a share of the market in anticipation of expensive fuel and regulatory bodies.