Marketers accuse Dangote of price-fixing, market manipulation

•Urge refinery to compete globally, not suppress local distributors

By Adewale Sanyaolu

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has accused Dangote Petroleum Refinery over plans to exploit Nigerians and monopolise the downstream sector going by its recent forward integration adoption.

It warned further that the plan could pose a significant job loss threat to Nigeria.

PETROAN in a statement by its National Publicity Secretary, Mr. Joseph Obele, argued that Dangote Refinery with a production capacity of 650,000 barrels per day( bpd), should be competing with global refineries, not operating as a distributor in the downstream sector.

“This massive refinery, one of the largest in sub-Saharan Africa, is expected to satisfy domestic fuel demand and export surplus products.

PETROAN had previously raised alarms about Dangote’s intentions to dominate the downstream sector, citing concerns that the company may leverage its market power to fix prices, limit competition, and exploit consumers, much like it has done in other sectors.

The marketers explained that, Dangote’s tactics 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.

This, it said, could lead to a massive shutdown of filling stations across Nigeria, resulting in widespread job losses.

It added that, the introduction of 4,000 brand-new Compressed Natural Gas (CNG)-powered tankers by Dangote Refinery poses a significant threat to the livelihoods of thousands of truck drivers and owners.

PETROAN stated that, while CNG trucks may offer a lower cost of transporting petroleum products, this shift could lead to widespread job losses in the industry.

The marketers added that, the adoption of a forward integration strategy by Dangote Refinery will greatly affect various stakeholders, including; modular refineries, saying their operations and market share may be threatened by Dangote’s dominance.

“For truck owners, job losses and reduced business opportunities may occur due to

Dangote’s direct supply and CNG-powered tankers. Many filling station operators may be forced to shut down due to Dangote’s pricing penetration strategy and dominance.

For local suppliers of petroleum products, their businesses may be negatively impacted by Dangote’s direct supply to end-users while the operations of telecom diesel suppliers and market share may be threatened by Dangote’s dominance.

It reiterated that Dangote’s plan to gain full monopoly of the downstream sector could lead to higher prices, reduced competition, and decreased economic efficiency.

On his part, the National President of PETROAN, Mr. Billy Gillis Harry, called on Authority Chief Executive/CEO of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Minister of State for Petroleum Resources to put in place price control mechanisms to prevent any form of monopoly.

Harry emphasised that competition should always beencouraged to protect consumers and promote economic efficiency.

According to him, the key concerns of PETROAN include; the tendency for the refinery’s operations to lead to job losses and its negative impact on employment opportunities

He warned that Dangote Refinery’s adoption of forward integration could lead to anti competitive behaviours and unfair market practices

The PETROAN President however, recommended that a competitive refining market environment that would promote competition, strengthening regulatory agencies to monitor market behavior, ensure crude oil supply to local refineries and mitigation of job losses to create alternative livelihoods for affected workers