The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) criticizes the N990 per litre pricing of Premium Motor Spirit (PMS) set by Dangote Refinery, calling it unreasonable.
In a statement issued on Monday in Abuja, Dr. Joseph Obele, PETROAN’s National Public Relations Officer, stresses the importance of healthy competition in the petroleum sector to prevent exploitation and ensure fair pricing. Obele responds to claims from Dangote Refinery suggesting that PETROAN plans to import substandard fuel at lower prices, dismissing these allegations as expected.
This statement follows an announcement by both PETROAN and the Independent Petroleum Marketers Association of Nigeria (IPMAN) about their plans to offer PMS at prices significantly lower than the current market rate. Obele clarifies that PETROAN has not directly compared its prices with Dangote Refinery’s, as the refinery’s pricing is only made public on Monday.
Obele confirms that PETROAN has secured agreements with foreign refinery partners and financial institutions to import high-quality PMS, with plans to sell it at more competitive prices. The association anticipates entering the market before December 2024, contingent on regulatory approval and access to foreign exchange from the Central Bank of Nigeria at the official rate.
He criticizes Dangote Refinery’s N990 price point, arguing that it is unfair, given the substantial concessions the refinery received to access foreign exchange during its construction. According to Obele, the key factor in determining petrol prices should be production costs, with a reasonable margin added for profit.
PETROAN Stands by High Standards for Imported Products
Obele also rejects accusations that PETROAN intends to import substandard fuel or that an international company is trying to establish a PMS blending plant in Lagos. He describes these claims as tactics aimed at monopolizing the market to hinder competition and inflate prices.
He emphasizes that PETROAN’s efforts focus on providing solutions to the ongoing pricing instability in Nigeria’s downstream sector, supporting President Tinubu’s reform agenda aimed at liberalizing the market. Obele argues that promoting vigorous competition ensures fair pricing and benefits consumers by offering better value.
Background on the Dispute
A conflict arises between Dangote Refinery and Nigerian petrol marketers over fuel pricing. Aliko Dangote, CEO of Dangote Refinery, reveals that despite having over 500 million liters of petrol in storage, marketers refrain from purchasing fuel from his facility. In response, IPMAN and PETROAN contend that the refinery’s prices exceed the cost of importing fuel. Dangote Refinery, however, insists that only lower-quality fuel would be sold at cheaper prices, asserting that their pricing aligns with international standards and includes discounts to stay competitive.
