The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has raised red flags over Dangote Refinery’s latest initiative to distribute fuel products directly to retail outlets across the country.
Following a recent announcement by the Dangote Group about expanding its fuel supply operations nationwide, PETROAN, through a statement signed by its National Public Relations Officer, Joseph Obele, expressed deep concern that such a move could lead to a veiled monopoly and threaten numerous jobs in Nigeria’s petroleum sector.
According to the association, “The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has raised concerns about Dangote Refinery’s forward integration adoption, warning that it could lead to a monopoly in disguise and pose a significant job loss threat to Nigeria.”
PETROAN argued that with a massive production capacity of 650,000 barrels per day, the Dangote facility should focus on competing on a global stage rather than attempting to dominate the local distribution market.
“This massive refinery, one of the largest in sub-Saharan Africa, is expected to satisfy domestic fuel demand and export surplus products,” the group noted.
The association also recalled earlier warnings about potential anti-competitive tactics from the refinery, citing fears that it could manipulate market prices, stifle competition, and disadvantage consumers, “much like it has in other sectors.”
“Dangote’s tactics,” PETROAN warned, “may include a pricing penetration strategy, where they reduce prices to capture market share, with the ultimate goal of forcing other filling station operators to quit the market.”
Such a strategy could ultimately lead to “a massive shutdown of filling stations across Nigeria, resulting in widespread job losses,” the statement added.
Additionally, PETROAN voiced apprehension over Dangote’s introduction of 4,000 compressed natural gas (CNG)-powered trucks, stating it would displace thousands of current tanker drivers and truck owners.
“While CNG trucks may offer a lower cost of transporting petroleum products, this shift could lead to widespread job losses in the industry,” it said.
The group also pointed out that the move threatens smaller players such as modular refineries and independent suppliers, who may be squeezed out of the market due to the refinery’s market dominance.
The statement concluded with a warning: “Filling Station Operators: Many may be forced to shut down due to Dangote’s pricing penetration strategy and dominance.
“Local Suppliers of Petroleum Products: Their businesses may be negatively impacted by Dangote’s direct supply to end-users.
“Telecom Diesel Suppliers: Their operations and market share may be threatened by Dangote’s dominance.
“It is obvious that Dangote plans to gain full monopoly of the downstream sector, which would enable the company to exploit Nigeria’s petroleum consumers.”
