The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has strongly criticized Dangote Refinery’s proposed plan to distribute petroleum products directly to outlets across the country, warning that the move could stifle competition and lead to massive job losses.
In a statement issued Monday and signed by its National Public Relations Officer, Joseph Obele, the association accused the refinery of adopting a "forward integration" strategy that could amount to a monopoly in disguise.
“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,” the statement read.
According to the association, the 650,000-barrels-per-day refinery — the largest in sub-Saharan Africa — should focus on competing with other global refineries in fuel production and export, rather than venturing into the downstream distribution space.
The group expressed fears that Dangote’s strategy could destabilize existing players in the downstream petroleum sector, including independent marketers, modular refineries, petroleum product suppliers, and transportation service providers.
Fears of Market Domination and Price Manipulation
PETROAN alleged that Dangote may deploy a pricing penetration strategy — deliberately slashing prices to undercut competitors and capture market share — a tactic the association says has been used by the group in other sectors.
“This could result in the closure of thousands of independently owned filling stations, leaving many jobless and causing a ripple effect across the economy,” the statement warned.
The association also pointed to the refinery’s planned deployment of 4,000 compressed natural gas (CNG)-powered tankers as another major threat to the survival of traditional petroleum truck drivers and owners.
“While CNG trucks may be more cost-effective for product transportation, their introduction on such a large scale could render thousands of truck drivers and transport operators jobless,” the group said.
Threat to Other Stakeholders
PETROAN listed several stakeholders it believes will be adversely affected if Dangote’s direct-distribution model goes unchecked:
Filling Station Operators: Many may be forced to shut down due to Dangote’s pricing strategy and overwhelming market dominance.
Local Petroleum Suppliers: Their relevance and operations could diminish as Dangote moves to supply products directly to end-users.
Modular Refineries: Smaller refineries may struggle to compete or survive, threatening Nigeria’s refining diversity.
Telecom Diesel Suppliers: Vendors who supply diesel for backup power to telecom infrastructure could also lose market share.
The association concluded that Dangote’s latest business move appears to be designed to gain full control of the downstream oil sector, a development it says will enable price manipulation and exploitation of Nigerian consumers.
PETROAN urged regulators and policymakers to take urgent steps to ensure fair competition in the sector and prevent what it described as the emergence of a fuel distribution monopoly.
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