By Adedapo Adesanya
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) is set to engage the Dangote Oil Refinery in a price war.
On Monday, the association maintained that its members could sell petrol cheaper than the price Dangote refinery was currently offering oil marketers in Nigeria.
Dangote had on Sunday accused PETROAN of planning to make Nigeria a dumping ground for substandard petroleum products.
The company stressed that any organisation that imports fuels lower than it is currently selling was selling low-quality products.
However, in a statement by its National Public Relations Officer, Mr Joseph Obele, the group said its members have already successfully incorporated a strategic business unit for that purpose.
The organisation noted that the agenda of President Bola Tinubu for the oil sector remains inimical to advocates and beneficiaries of a monopolistic market.
PETROAN stressed that President Tinubu’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.
“Contrary to competition, such a market will be exploitative and strictly for profiteering. The publication by Dangote refinery that PETROAN will import substandard petroleum products is not coming as a surprise to stakeholders, because such is his usual gimmick for maintaining a monopoly,” it added.
PETROAN argued that it has never compared the price of Dangote petrol with any other, based on the fact that Dangote’s price wasn’t known until the company’s disclosure recently.
“PETROAN has concluded plans with her foreign refinery counterparts and financial partners to import the best quality of Premium Motor Spirit (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 licence by the regulatory agency and access to foreign exchange from the Central Bank of Nigeria (CBN) at the official rate.
“Before now, Dangote Refinery had refused to make public her selling rate of PMS until IPMAN and PETROAN announced readiness to sell less. The rate of N990 as announced by Dangote Refinery was inconsiderate based on the fact Dangote Refinery enjoyed massive concessions for accessing foreign exchange during the construction of the refinery.
“The core determinant for setting the price is a consideration for the cost of production, then the addition of a fair margin. But this wasn’t the case for the determination of PMS price by Dangote Refinery as they said the parameter was in comparison with the international selling rate at the global market,” it accused.
It also noted that diesel as a deregulated product was selling for less than N800 in the Nigerian market a few weeks before the commencement of diesel production by the Dangote Refinery.
“At the entrance of the market by Dangote refinery, we witnessed a rapid surge above N1,000. PETROAN uses this medium to commend Mr President for his commitment towards the revamping of the nation-owned refineries.
“We will maintain our position by counselling that the Port Harcourt and Warri Refinery plant after rehabilitation should immediately be privatised and handed over to a reputable firm that has the technical capability, managerial skills and financial strength in partnership with PETROAN and other critical stakeholders.
“This will enable the operators of the government-owned refineries to withstand aggressive competition that will be posed by the known beneficiaries of the monopolistic market,” it added.