The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) on Monday expressed concern over Dangote Refinery’s proposed plan to commence the direct nationwide distribution of petrol and diesel.
The refinery had, on 15 June, announced its intention to begin supplying fuel directly to consumers across the country.
In a statement issued on Monday, PETROAN spokesperson, Mr Joseph Obele, warned that the move could have serious implications for the country’s downstream sector.
According to him, the potential consequences include large-scale job losses and the closure of small businesses across the value chain.
Reacting to the development, PETROAN National President, Dr Billy Gillis-Harry, cautioned that the strategy could result in a monopolistic market structure, restrict competition, and threaten thousands of livelihoods within the petroleum 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 argued that the move poses a threat to the sustainability of independent marketers, truck owners, filling station operators, and modular refinery owners who depend on the existing supply chain.
Gillis-Harry further stated that Dangote’s potential market dominance could result in higher fuel prices due to reduced competition, while also causing the collapse of businesses within the retail segment.
The PETROAN president added that the development may lead to widespread job losses among truck drivers, product suppliers, and station workers.
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He also raised concerns over Dangote’s planned deployment of 4,000 Compressed Natural Gas (CNG)-powered tankers, noting that although it may reduce transportation costs, it could displace traditional tanker drivers and vehicle 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.
He warned that the company’s market strength could allow it to fix prices in a manner that might disadvantage consumers, citing similar trends observed in other sectors where the conglomerate holds significant presence.
As a preventive measure, Gillis-Harry called on the Executive Director of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Minister of State for Petroleum Resources to swiftly implement price control frameworks and enforce fair competition regulations.
“Competition must be protected and encouraged to safeguard consumers, preserve jobs, and maintain a healthy petroleum distribution ecosystem,” he stressed.
