… Urge FG To Dismantle Dangote’s Monopoly Attempt
Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has replied Dangote Petroleum Refinery with a promise to crash prices of Premium Motor Spirit below the current price which it described as high.
PETROAN also vowed to end Dangote Refinery’s alleged monopoly which it claimed resulted in the high prices of PMS despite refining locally.
The association said in a statement on Monday seen by NewsNGR that it has set up a strategic business unit called PETROL to compete actively with Dangote in order to crash PMS prices.
PATROAN’s response follows a release by the Dangote Refinery accusing the association and Independent Petroleum Marketers Association of Nigeria (IPMAN) of planning to connive with international firms to dump sub-standard PMS in the country.
“If anyone claims they can land PMS at a price cheaper than what we are selling, then they are importing substandard products and conniving with international traders to dump low-quality products into the country, without concern for the health of Nigerians or the longevity of their vehicles,” Dangote said in a statement signed by Group Chief Branding Officer, Anthony Chiejina.
However, PETRAON accused Dangote of working against national interest despite benefiting largely from government support during the building of the 650,000 barrels per day refinery.
PETRAON said, “The reformative and transformational agenda of the President are seen as inimical to advocates and beneficiaries of the monopolistic market. The President’s interventions were
meant to liberalise the downstream sector by building an all-inclusive market.
“Intensive or aggressive competition in any market brings the best value for money exchange for a commodity. Consumers get the best value for pricing when competition is at its peak, hence competition should be encouraged.
“Contrarily to competition, such a market will be exploitative and strictly for profiteering. The publication by Dangote Refinery that PETROAN will import substandard
Petroleum products are not coming as a surprise to stakeholders, because such is his usual gimmick for maintaining a monopoly.”
PETRAON further claimed that Dangote’s PMS price wasn’t known until it disclosed it in the press release where it said it has “gone below to sell at N960 per litre for sale into ships while maintaining N990 per litre for sale into trucks.”
The association said it plans to begin importation of PMS by December 2024 in a bid to crash price of PMS.
PETRAON said, “PETROAN has concluded plans with her foreign refinery counterparts and financial partners to import the best quality of PMS and then sell far less than the present selling rate of PMS in Nigeria.
“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 their readiness to sell less. The rate of N990 as announced by Dangote Refinery was inconsiderate based on the fact that Dangote Refinery enjoyed massive concessions for accessing foreign exchange during the construction of the refinery.
“The core determinant for setting price is a consideration for the cost of production then adding a fair margin. But this wasn’t the case for the determinant of PMS price by Dangote refinery as they said. The parameter was a comparison with the international selling rate at the global market. 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 the cost of production plus a fair margin.”
The association said that the allegation that it plans to dump substandard products in the country was baseless.
“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 in view of achieving
monopoly for exploitation.
“Evidences available showed that diesel (AGO) as a deregulated product was selling less than N800 in Nigeria market a 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 N1,000 as against the perception of a ‘salvaging refinery’.
The association commended President Bola Tinubu for his commitment towards the revamping of the nation-owned refineries, adding that it is on record that the ongoing rehabilitation project never suffered funding issues Under him.
PETRAON further urged the president who doubles as the Minister of Petroleum to guard the industry from monopoly.
PETRAON said, “Balance market should be an all-inclusive market player where the market leader is enjoying his lead, while the market challenger is servicing a certain degree of the consumers and the market followers are still surviving in the market at affordable prices. Therefore, it is penitent that the federal government should discourage and dismantle any attempt at monopoly in the downstream sector in view of crashing the current selling rate of PMS.
“The only catalyst to trigger PMS price reduction is by ushering in competition and PETROAN will support the federal government in achieving intensive competition in the sector.”