Retailers Warn Against Dangote Refinery’s Downstream Monopoly, Say Job Losses Loom

Petroleum merchandise retail outlet house owners have raised issues over the potential monopolistic menace posed by Dangote Refinery’s ahead integration technique in Nigeria’s downstream petroleum sector.

Talking beneath the aegis of the Petroleum Merchandise Retail Retailers House owners Affiliation of Nigeria (PETROAN), the outlet house owners warned that the refinery’s dominance may result in widespread job losses and undermine competitors, calling on regulators to place in place sturdy management mechanisms to verify the corporate’s market energy.

Dangote Refinery, with its spectacular manufacturing capability of 650,000 barrels per day, is among the largest in sub-Saharan Africa. Whereas the refinery is predicted to satisfy Nigeria’s home gasoline demand and export surplus merchandise, PETROAN insisted that its position must be confined to competing with world refineries somewhat than controlling the downstream distribution community inside Nigeria.

Nationwide president of PETROAN, Dr. Billy Gillis Harry, who expressed deep concern concerning the refinery’s direct involvement in downstream operations, stated, “Dangote Refinery is not only a refinery; it’s aggressively transferring into distribution, utilizing its large manufacturing capability to dominate the market. This threatens the very existence of 1000’s of unbiased filling station operators and truck house owners who’ve been the spine of Nigeria’s petroleum provide chain.”

A key factor of Dangote’s technique is the introduction of 4,000 brand-new Compressed Pure Fuel (CNG)-powered tankers, which PETROAN warned may displace 1000’s of conventional truck drivers and house owners. “Whereas CNG vehicles might cut back transportation prices, the sudden shift will devastate the livelihoods of many who rely on petroleum product transportation for his or her revenue,” Dr. Harry added.

PETROAN additionally highlighted Dangote’s pricing penetration ways, the place the refinery may quickly cut back gasoline costs to seize market share and push rivals out of enterprise.

“It is a traditional monopoly play. As soon as rivals are eradicated, costs will inevitably rise, leaving customers on the mercy of a single dominant participant,” Dr. Harry warned.

The affiliation’s issues prolong past job losses. PETROAN fears that Dangote’s dominance may stifle competitors, cut back market effectivity, and result in value fixing. “We’re calling on the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Ministry of Petroleum to step up regulatory oversight. Value management mechanisms should be established to forestall any type of monopoly that harms customers and the economic system,” Dr. Harry urged.

Furthermore, PETROAN advocates for the safety and help of native modular refineries, which face existential threats from Dangote’s market energy. “Native refineries are very important for financial diversification and job creation. They should be supported with satisfactory crude provide and truthful market situations to thrive alongside Dangote Refinery,” Dr. Harry stated.

The affiliation additionally dismissed claims by Dangote Refinery that imported petroleum merchandise are substandard, describing such statements as ways to justify market dominance and suppress competitors. “Accusations in opposition to importers are unfounded and seem designed to guard a monopoly somewhat than guarantee product high quality,” he famous.

PETROAN emphasised the pressing want for a balanced method that encourages industrial progress whereas defending jobs and customers. “Nigeria’s petroleum sector should stay aggressive and inclusive. Regulatory our bodies should act decisively to make sure Dangote Refinery’s growth doesn’t come on the expense of 1000’s of employees and hundreds of thousands of customers,” Dr. Harry stated.