The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has issued a warning against monopolies and unfair competition in the downstream oil sector, advocating for healthy competition instead.
In a statement signed by its National Public Relations Officer, Dr. Joseph Obele, PETROAN urged regulatory authorities to foster a competitive environment and maintain price stability in the country’s downstream petroleum sector to prevent monopolies and support local refineries.
“The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) is committed to promoting healthy competition and controlling price fluctuations in the downstream sector,” the statement said.
The association expressed concern over the “massive” financial losses resulting from a recent “sudden” drop in petrol prices. According to Nairametrics, the Dangote Refinery reduced the price of Premium Motor Spirit (petrol) by N65. In response, the Nigeria National Petroleum Company Limited (NNPCL) quickly followed suit with its own price reduction, leading to a price war between the two companies. Nairametrics also reported that retail partners of Dangote Refinery are now selling petrol at varying prices depending on the region, with Lagos offering the lowest price. Furthermore, it was confirmed that NNPCL has reduced its pump prices in retail outlets in Lagos.
In its statement on Monday, PETROAN noted that these sudden price cuts have resulted in significant financial losses amounting to billions of Naira. “The association emphasized that this abrupt downward adjustment in prices has led to massive losses, with affected parties counting their losses in billions of Naira. This situation poses a substantial concern for future investment in the sector, as investors are hesitant due to unpredictable market conditions,” Obele highlighted.
PETROAN also stressed the need for multiple supply sources, including the Dangote Refinery, NNPC refineries, modular refineries, and imports. This perspective contrasts with protests from some stakeholders against the continued issuance of import licenses, despite the existence of local supplies.
PETROAN argued that a diverse supply base would enable competition between local and imported petroleum products, ensuring fair pricing and protecting the market from exploitation. “After consulting with key stakeholders like MEMAN, DAPPMAN, and NUPENG, PETROAN has emphasized the importance of preventing monopolies and supporting local refineries, given their significant economic benefits to the country.
“To achieve this, PETROAN advocates for a variety of supply sources, including the Dangote Refinery, NNPC refineries, modular refineries, and imports. This variety will foster competition, especially against imports, enabling comparisons with international market prices and shielding the local market from exploitation,” the statement continued.
PETROAN called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Federal Competition and Consumer Protection Commission (FCCPC) to remain vigilant and prevent unfair competition practices.
Additionally, while advocating for diverse supply sources, PETROAN requested support for local refineries, highlighting key benefits such as:
– Increased domestic production of petroleum products
– Reduced reliance on imports
– Creation of jobs and stimulation of economic growth
– Improved energy security and reduced vulnerability to fluctuations in international markets.
