The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has warned against monopolies and unfair competition in the downstream oil sector while calling for healthy competition.
In a statement signed by its National Public Relations Officer, Dr. Joseph Obele, PETROAN urged regulatory authorities to promote healthy competition and price stability in the country’s downstream petroleum sector to prevent monopolies and protect local refineries.
“The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has taken a firm stance on promoting healthy competition and controlling price fluctuations in the downstream sector,” the statement read.
The recent drop in pump price led to massive losses
PETEOAN also lamented over the “massive” financial losses caused by the recent “sudden” drop in the price of petrol.
- Nairametrics reported that the Dangote refinery made a N65 reduction in the price of Premium Motor Spirit (also known as petrol).
- The Nigeria National Petroleum Company Limited (NNPCL) quickly responded with a price reduction, signaling a price war between the two companies.
- Nairametrics reported that retailing partner outlets of the Dangote Refinery now sell between N860 and N890 based on the state/region, with Lagos having the cheapest price. We also confirmed that NNPCL reduced pump prices in its retail outlets in Lagos to N860.
PETROAN, in its statement on Monday, said the sudden price cuts led to massive losses in billions of Naira.
“The association stressed that the sudden downward review of prices has resulted in massive losses, with those affected counting their losses in billions of naira. This situation poses a significant fear for further investment in the sector, as investors are wary of unpredictable market conditions,” Obele noted.
Encourages multiple supply sources
The PETROAN spokesperson emphasized the need for multiple supply sources, including the Dangote Refinery, NNPC refineries, modular refineries, and imports.
This is contrary to protests by some stakeholders against the continued issuance of import licenses despite the availability of local supplies.
PETROAN argued that a diverse supply base would allow competition between local and imported petroleum products, ensuring fair pricing and shielding the market from exploitation.
“After consulting with key stakeholders like MEMAN, DAPPMAN, and NUPENG, PETROAN emphasized the importance of preventing monopolies and ensuring local refineries thrive, given their significant economic benefits to the country.
“To achieve this, PETROAN advocates for a multiplicity of supply sources, including Dangote Refinery, NNPC refineries, modular refineries, and imports.
“This diverse range of sources will foster competition, especially with imports, allowing for comparisons with international market prices and protecting the local market from exploitation,” the statement read further.
It called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Federal Competition and Consumer Protection Commission (FCCPC) to be vigilant and prevent unfair competition practices.
Encourages support for local refineries
While advocating a multiplicity of supply sources, PETROAN also sought support for local refineries, highlighting the following benefits:
- 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 international market fluctuations.
