PETROAN Raises Alarm Over Dangote Refinery’s Fuel Distribution Plans, Lists Negative Impact

• Oil marketers under the aegis of PETROAN are unhappy with Dangote Refinery’s move to begin fuel distribution.
• They fear it could lead to job losses and business shutdowns across Nigeria's petroleum value chain
• The president of PETROAN told Legit.ng that it is important for the government to step in and avoid a monopoly

Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) have expressed strong concerns over the decision by Dangote Refinery to venture into the direct distribution of fuel across the country.

The oil marketers warns that the move could cripple businesses and lead to massive job losses in Nigeria’s petroleum value chain.

In a chat with Legit.ng, Dr. Billy Gillis Harry PETROAN, President, noted that the refinery’s plan to adopt a forward integration model where the producer also becomes a distributor poses a threat of creating a monopoly in the downstream oil sector.

He called on the government to intervene and introduce regulatory safeguards to prevent market dominance and protect existing operators.

Harry said:

“With a refining capacity of 650,000 barrels per day, Dangote Refinery should be competing globally, not muscling into the downstream sector at the expense of thousands of small players.

“This is a clear case of a monopoly in the making.”

Harry urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Minister of State for Petroleum to act swiftly by enforcing price control mechanisms and supporting fair market competition.

The president stated:

"Dangote is like a big gaint that is showing it can kill small business. The government should step in."

“The future of Nigeria’s petroleum sector must not be handed over to a single company.

“We need a balanced and inclusive approach to energy distribution.”

PETRON wants government protection

Also, in a statement signed by Joseph Obele, National PRO, PETROAN warns that Dangote’s market strength could allow it to set fuel prices unilaterally, employ pricing tactics, and force other players out of business.

The group said that Dangote's action could result in the closure of thousands of filling stations and the loss of countless jobs.

The statement added:

"It is obvious that Dangote plans to gain full monopoly of the downstream sector, which would enable the company to exploit Nigeria's petroleum consumers. This could lead to higher prices, reduced competition, and decreased economic efficiency."

The association also raised concerns about the introduction of 4,000 Compressed Natural Gas (CNG)-powered tankers by Dangote, noting that while CNG trucks are cost-effective, they pose a serious threat to the livelihoods of current petroleum product truck drivers and owners.

According to PETROAN, the likely impacts include:

• Job losses in the transportation and retail sectors
• Displacement of local suppliers and modular refineries,
• Unfair market control by one dominant player, and
• Higher prices for end-users due to a lack of competition in the long run.

PETROAN recommendation:

• Promoting competition in refining and distribution,
• Strengthening regulatory oversight
• Supporting local refineries with access to crude oil, and
• Developing alternative livelihoods for potentially displaced workers.

Dangote refinery announces fuel bonanza

Earlier, Legit.ng reported that there is a huge shake-up in Nigeria's downstream sector following Dangote Petroleum Refinery's announcement on Sunday, June 15, of direct free distribution of petrol and diesel across the country.

The refinery move means that traditional depots and middlemen will be bypassed in a sweeping strategy that could permanently alter fuel supply distribution.

Source: Legit.ng