The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has strongly condemned the N990 price set for Premium Motor Spirit (PMS) by Dangote Refinery, describing it as “inconsiderate” and calling for more competition within the sector to prevent profiteering.
In a statement released Monday in Abuja, Dr. Joseph Obele, PETROAN’s National Public Relations Officer, criticized the price set by the refinery, emphasizing that it does not reflect the need for competitive pricing in Nigeria’s downstream oil sector. Obele further dismissed claims from Dangote Refinery suggesting that PETROAN intends to import substandard fuel at a lower price, stating that such accusations were anticipated but unfounded.
Pricing Dispute Escalates Between Dangote Refinery and Marketers
The ongoing dispute between Dangote Refinery and petrol marketers, including PETROAN and the Independent Petroleum Marketers Association of Nigeria (IPMAN), centers around the pricing of PMS. While Dangote Refinery has set its price at N990 per litre, marketers argue that the cost is unreasonably high compared to the landing cost of imported fuel. This pricing disagreement comes despite Dangote Refinery holding over 500 million litres of petrol in storage, according to company CEO Aliko Dangote.
PETROAN has been vocal about its plans to sell PMS at a significantly lower price than the current market rate. Obele clarified that while PETROAN had not made direct comparisons with Dangote’s pricing prior to the refinery’s announcement, the association intends to import high-quality PMS at a more affordable price. “We have finalized arrangements with our foreign refinery partners and financial backers to import PMS at a price lower than what is currently being sold in Nigeria,” Obele said.
PETROAN’s plan is to enter the market before December 2024, contingent upon receiving the necessary import permit from regulatory authorities and securing foreign exchange at the official rate from the Central Bank of Nigeria.
A Call for Competitive Pricing
Obele also pointed out that Dangote Refinery’s price setting was influenced by favorable concessions it received for foreign exchange during the refinery’s construction. He noted that while production costs are a primary factor in pricing, it is equally important to include a fair margin that benefits consumers. The PETROAN spokesperson emphasized that competition is critical for the health of the market, stating, “Consumers get the best value for pricing when competition is at its peak. A monopolistic market leads to exploitation and profiteering.”
PETROAN’s stance is aligned with President Bola Ahmed Tinubu’s agenda to liberalize the downstream oil sector, opening it up to more competition and reducing the influence of monopolistic players. The association views its role as part of the broader reformative efforts to create a more inclusive and competitive market that delivers fair value to consumers.
Refuting Allegations of Substandard Imports
In response to allegations from Dangote Refinery that PETROAN might import substandard fuel, Obele reiterated the association’s commitment to high standards in fuel imports. He dismissed these accusations as tactics designed to maintain a monopoly, stating that such claims were aimed at undermining the entry of new market players. “PETROAN’s focus is solution-driven and patriotic, aimed at stabilizing the sector and addressing the pricing instability that has plagued Nigeria’s downstream oil market,” he added.
Looking Ahead
The dispute over PMS pricing is reflective of broader challenges within Nigeria’s downstream petroleum sector, which has long been marred by pricing instability and inefficiencies. As marketers prepare to enter the market with imported PMS, the rivalry with Dangote Refinery is expected to intensify, with both parties vying for market share and consumer trust.
The outcome of this pricing standoff could have significant implications for Nigeria’s oil market, particularly as the government pushes forward with reforms designed to foster greater competition and ensure better pricing for consumers.
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As the situation evolves, industry stakeholders are keeping a close eye on how these developments will impact fuel pricing, availability, and the broader petroleum market in Nigeria.
