PETROAN: Dangote refinery’s substandard allegation is an attempt to suppress competitors

Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has accused Dangote Petroleum Refinery of trying to suppress competitors in the downstream sector.

On November 1, the Independent Petroleum Marketers Association of Nigeria (IPMAN) said petrol — also known as premium motor spirit (PMS) — from the refinery is more expensive than buying from other sources.

Yakubu Suleiman, national assistant secretary of IPMAN, said the group’s members go for more affordable options at other depots across Nigeria than the high logistical costs associated with buying petrol from the Dangote refinery.

Responding to the claim, Dangote refinery said its ex-depot price of petrol is N990 per litre for trucks and N960 per litre for ships.

Dangote refinery said its prices are benchmarked against the international prices and the amount the Nigerian National Petroleum Company (NNPC) Limited sold to local marketers.

On Sunday, the refinery said any oil marketer that sells petrol cheaper than the price it offers is importing substandard products.

In a statement signed by Joseph Obele, PETROAN spokesperson, on Monday, the association said the accusation of importing substandard products by Dangote refinery is “his usual gimmick for maintaining monopoly”.

According to PETROAN, consumers get the best value for pricing when competition is at its peak, hence competition should be encouraged.

PETROAN said the group has never compared the price of Dangote refinery’s petrol with any other.

“PETROAN has concluded plans with her foreign Refinery counterparts and financial partners to import the best quality of PMS and then sell far lesser than the present selling rate of PMS in Nigeria,” the retailers said.

“We planned to enter the market before December 2024, pending the approval of our import permit license by the regulatory agency and access to foreign exchange from CBN at the official rate.

“Before now, Dangote Refinery has refused to make public her selling rate of PMS until IPMAN and PETROAN announced readiness to sell lesser.

“The rate of #990 as announced by Dangote refinery was inconsiderate base on the fact Dangote Refinery enjoyed massive concession for accessing foreign exchange during the construction of the refinery.”

‘CORE DETERMINANT FOR SETTING PRICE IS COST OF PRODUCTION’

PETROAN said the core determinant for setting the price is the cost of production and margin.

“But this wasn’t the case for the determinant of PMS price by Dangote refinery as they said the parameter was comparison with the international selling rate at the global market,” PETROAN said.

“A nation that gave you a yet to be disclosed concession for foreign exchange which was highly criticised by financial experts, such a country Pricing template shouldn’t have been templated by the selling rate at the international market but rather it should have been cost of production plus fair margin.

“Goods from the China markets are not selling as high like goods from the America market because the cost of production differs.

“The allegations that PETROAN will import inferior Products and saying also that an international company is trying to establish a PMS blending plant in Lagos are all strategies for Dangote Refinery to push others out of the market inview achieving monopoly for exploitation.

“Few months ago the CEO of Dangote Refinery said NNPC LTD was importing inferior petroleum products, that his own was far better than what NNPC LTD was selling to marketers. 

“In another press conference he said the refinery at Malta was just a blending plant and not a refinery. 

“Evidences available showed that diesel (AGO) as a deregulated product was selling less than #800 in Nigeria market few weeks before the commencement of AGO production by Dangote Refinery, at the entrance of AGO market by Dangote refinery we witnessed a rapid surge above #1,000 as against the the perception of a ‘Salvaging Refinery’.”

PETROAN said Dangote refinery made the allegations “with the objectives of closing the doors for other operators so to enjoy monopoly”.