Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.

Dangote Refinery's plan to begin direct nationwide distribution of petrol and diesel has sparked anxiety from the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN).

According to a statement released on Monday by PETROAN spokesperson Mr. Joseph Obele, Dangote's action may have an impact on the downstream industry in the country.

He claims that the closure of small firms and the loss of many jobs are examples of such repercussions.

Dangote Refinery announced on June 15 that it would be distributing gasoline and diesel directly to Nigerian consumers.

Dr. Billy Gillis-Harry, the national president of PETROAN, responded to this development by warning that the plan could lead to a monopolistic market structure, which would hinder competition and jeopardise the livelihoods of thousands of people in the industry.

“With a production capacity of 650,000 barrels per day, Dangote Refinery should be positioning itself to compete with global refiners rather than engaging in direct distribution within Nigeria’s downstream sector,” Gillis-Harry said.

The survival of independent marketers, truck owners, filling station operators, and operators of modular refineries who dep

Gillis-Harry pointed out that because of the diminished competition and company closures throughout the fuel retail sector, Dangote's hegemony may result in increased fuel prices.

According to the president, the scenario may also result in a significant loss of jobs for station operators, truck drivers, and suppliers of petroleum products.

He warned that although Dangote's launch of 4,000 new tankers powered by compressed natural gas (CNG) may reduce transportation costs, it may also threaten the jobs of conventional tanker owners and drivers.

“Filling station operators, truck owners, telecom diesel suppliers, and modular refineries are all at risk.

“Dangote’s approach could trigger a pricing penetration strategy aimed at capturing market share and forcing competitors out of the market,” Gillis-Harry added.

Noting similar trends in other areas where the company participates, the PETROAN CEO stated that Dangote's market dominance might permit price setting that could harm consumers.

Thus, Gillis-Harry called on the Minister of State for Petroleum Resources and the Executive Director of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to enact pricing control measures and uphold fair competition laws immediately.

“Competition must be protected and encouraged to safeguard consumers, preserve jobs, and maintain a healthy petroleum distribution ecosystem,” he stressed.

Legit.ng reported that following Dangote Refinery’s commencement of distribution of petrol and diesel nationwide, starting August 15, members of the Dangote Marketers Group have raised serious concerns, describing the move as a death sentence for businesses and value chain.

The marketers, who bridge the gaps between depot owners and filling stations, fear that the mega refinery’s new strategy of bypassing traditional middlemen and offering direct sales and logistics to end-users will spell doom for their businesses.

One marketer described the move as sounding the death knell on their businesses and means of livelihood, stating that jobs, businesses, and even families would be affected by the impact.

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Source: Legit.ng