The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has raised concerns over monopolistic practices and unfair competition in the downstream oil sector, calling for a market structure that encourages price stability and fair competition.
In a statement signed by its National Public Relations Officer, Dr. Joseph Obele, PETROAN urged regulatory authorities to take proactive steps in ensuring that no single entity dominates the sector, particularly in the wake of recent price reductions by key industry players.
“The sudden downward review of prices has resulted in massive losses, with those affected counting their losses in billions of naira.
“This situation poses a significant fear for further investment in the sector, as investors are wary of unpredictable market conditions.”
Dr. Joseph Obele, National Public Relations Officer
PETROAN expressed concerns about the unexpected price reductions in petrol prices, which have led to significant financial losses for stakeholders in the industry.
The association cited the recent N65 reduction in the price of Premium Motor Spirit (PMS) by the Dangote Refinery and the subsequent reaction from the Nigerian National Petroleum Company Limited (NNPCL), which further slashed prices.
According to PETROAN, the sudden downward adjustments have had devastating consequences for retailers and investors, who were caught off guard.
The association emphasized that these losses run into billions of naira, discouraging further investments in the sector due to its unpredictability.
The association is calling on regulatory bodies to ensure that competition remains fair and sustainable, warning that unchecked price fluctuations could have long-term negative effects on Nigeria’s oil and gas industry.
The recent price fluctuations and PETROAN’s concerns highlight deeper issues within Nigeria’s downstream petroleum sector.
Experts have long argued that an over-reliance on a few major players—such as the NNPC and Dangote Refinery—creates vulnerabilities in the market.
If one player dominates pricing, it can lead to unfair competition, ultimately harming smaller retailers and independent operators.
Need for Multiple Supply Sources
One of the key solutions PETROAN advocates for is the establishment and promotion of multiple supply sources for petroleum products in Nigeria.
The association believes that a diversified supply chain—including contributions from the Dangote Refinery, NNPC refineries, modular refineries, and imports—will promote healthy competition and ensure price stability in the market.
“This diverse range of sources will foster competition, especially with imports, allowing for comparisons with international market prices and protecting the local market from exploitation.”
Dr. Joseph Obele, National Public Relations Officer
This position contrasts with the stance of some industry stakeholders who oppose the continued issuance of import licenses, arguing that local production is sufficient to meet demand.
PETROAN, however, believes that allowing multiple sources, including imported petroleum products, would help prevent monopolistic pricing and ensure that consumers receive fair prices.
A key challenge in Nigeria’s downstream sector has been the limited refining capacity, which has made the country dependent on imported petroleum products for years.
The operationalization of the Dangote Refinery was expected to alleviate this challenge, but it has also introduced new concerns about price control and market dominance.
The recent price war between Dangote Refinery and NNPCL has raised fears that smaller operators may struggle to compete.
To prevent monopolistic practices, PETROAN called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Federal Competition and Consumer Protection Commission (FCCPC) to step in and ensure fair competition in the sector.
PETROAN’s statement is a clear message that unchecked market dominance could lead to instability in Nigeria’s downstream oil sector.
The association is advocating for a balanced regulatory approach that allows multiple players to operate while maintaining fair competition.
With price wars already impacting retailers and investors, the government must take decisive action to maintain a level playing field.
By encouraging multiple supply sources and enforcing fair pricing regulations, Nigeria can build a sustainable and competitive petroleum market that benefits all stakeholders.
The role of regulatory authorities such as NMDPRA and FCCPC will be crucial in ensuring that the industry remains open, transparent, and resistant to monopolistic control.
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