The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has expressed alarm over Dangote Refinery's recent announcement to begin direct nationwide distribution of petrol and diesel.
The move, unveiled on Sunday, could significantly impact Nigeria's downstream sector, according to PETROAN.
In a statement, PETROAN spokesperson Joseph Obele highlighted potential consequences of Dangote's strategy, including widespread job losses and the closure of small businesses. PETROAN National President Dr. Billy Gillis-Harry warned that direct distribution could create a monopolistic market structure, stifling competition and threatening thousands of livelihoods within the sector.
"With a production capacity of 650,000 barrels per day, Dangote Refinery should be competing globally rather than disrupting Nigeria's downstream sector," Gillis-Harry remarked. He emphasized that this move undermines the survival of independent marketers, truck owners, filling station operators, and modular refinery operators who depend on the current supply chain structure.
Gillis-Harry also noted that Dangote's dominance could lead to higher fuel prices due to reduced competition, potentially resulting in business closures across the fuel retail landscape. The introduction of 4,000 new Compressed Natural Gas (CNG)-powered tankers by Dangote, which could lower transportation costs, poses a threat to traditional tanker drivers and owners, he added.
Gillis-Harry cautioned that Dangote's approach might trigger a pricing penetration strategy aimed at capturing market share and forcing competitors out. He urged the Executive Director of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Minister of State for Petroleum Resources to implement price control mechanisms and enforce fair competition policies.
