Dangote’s Ambitions Spark Concern: Marketers Warn of Attempt to Monopolize Nigeria’s Oil Market
Oil marketers, represented by the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), have raised serious concerns over alleged attempts by Aliko Dangote, President of the Dangote Group, to monopolize Nigeria’s oil sector. PETROAN claims that Dangote is using his influence to hinder market competition, a move they argue is detrimental to fair pricing and consumer choice in the downstream petroleum market.
In a statement signed by PETROAN’s national public relations officer, Dr. Joseph Obele, the association called on the Nigerian Federal Government to take decisive action against monopolistic practices in the downstream oil sector. PETROAN’s call for reform aims to foster a more inclusive and competitive oil market, ensuring that consumers receive the best possible prices for petroleum products.
The tension escalated after Dangote Refinery allegedly published statements suggesting that PETROAN would import substandard petroleum products. PETROAN, however, dismissed these claims as an attempt by Dangote to undermine their plans to sell petroleum motor spirit (PMS) at prices significantly lower than current market rates.
Dr. Obele explained that PETROAN’s mission is to promote a liberalized downstream sector, highlighting that competition naturally results in fairer prices and improved quality for consumers. According to him, PETROAN, alongside the Independent Petroleum Marketers Association of Nigeria (IPMAN), has already initiated partnerships with international refineries and financial institutions to import premium PMS at competitive prices.
“PETROAN has concluded plans with its foreign refinery partners and financial allies to bring in high-quality PMS,” Dr. Obele said. He added that the organization aims to enter the market by December 2024, pending regulatory approvals and access to foreign exchange through the Central Bank of Nigeria (CBN).
PETROAN’s statement also highlighted concerns regarding Dangote Refinery’s newly publicized PMS rate of N990, a price PETROAN described as “inconsiderate” given the preferential foreign exchange access Dangote Refinery reportedly received during its construction. Dr. Obele argued that Dangote’s pricing model, which he claims is based on global market rates, fails to consider local production costs and should not be the primary determinant of PMS prices in Nigeria.
“A balanced market should allow multiple players to thrive, with leaders, challengers, and followers all contributing to affordable pricing,” PETROAN’s statement argued. They further called on the government to foster a competitive environment as a means of driving down prices and preventing a single entity from controlling the sector.
PETROAN emphasized that the best way to reduce PMS prices is through increased competition in the sector. The organization voiced its support for government efforts to open up the market to more players, arguing that a competitive environment would benefit consumers and stabilize the petroleum market.
In closing, PETROAN reiterated its commitment to promoting a balanced oil market where all players can contribute fairly. They called on the Federal Government to take swift action against monopolistic moves in the downstream oil sector, arguing that only with active competition will consumers see the true benefits in pricing and service quality.