The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has strongly opposed the recent move by Dangote Refinery to directly distribute its petroleum products to outlets across the country.
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Dangote Refinery, over the weekend, announced its readiness to expand nationwide fuel distribution as part of its downstream operations.
In a statement released on Monday and signed by PETROAN’s National Public Relations Officer, Joseph Obele, the association expressed concerns that the move could lead to a disguised monopoly and pose a significant threat to jobs across the country.
According to PETROAN, “Dangote Refinery’s forward integration strategy may result in monopolistic control of the downstream sector and massive job losses in Nigeria.”
“With a production capacity of 650,000 barrels per day, PETROAN argues that Dangote Refinery should be competing with global refineries, not functioning simultaneously as a producer and distributor within the domestic market.
“This refinery, one of the largest in sub-Saharan Africa, was expected to meet domestic fuel demands and export surplus products — not dominate the retail distribution chain.”
The association noted it had previously raised concerns over Dangote’s plan to dominate the downstream sector, warning that the company may use its market power to fix prices, stifle competition, and exploit consumers — a pattern PETROAN claims has been observed in other sectors.
The statement further alleged that Dangote may deploy a “price penetration strategy,” drastically cutting prices to gain market share with the aim of pushing independent filling station operators out of business.
“This could result in a massive shutdown of filling stations across Nigeria and lead to widespread job losses,” it said.
PETROAN also criticized the introduction of 4,000 new compressed natural gas (CNG)-powered tankers by Dangote Refinery, warning that this move could severely impact thousands of existing truck drivers and vehicle owners.
“While CNG trucks offer lower transportation costs for petroleum products, their deployment could displace many current transport operators, leading to further job losses in the sector,” the statement added.
According to the association, the strategy by Dangote Refinery will adversely affect a wide range of stakeholders, including:
- Modular Refineries: Their operations and market share may be threatened by Dangote’s growing dominance.
- Filling Station Operators: Many could be forced to shut down due to unsustainable pricing competition.
- Local Petroleum Product Suppliers: Their businesses may decline as Dangote begins direct-to-consumer supply.
- Telecom Diesel Suppliers: Their client base and revenue could be negatively impacted.
PETROAN concluded by warning that Dangote’s approach appears designed to secure full monopoly over the downstream petroleum sector, which could ultimately lead to exploitation of Nigerian fuel consumers.
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