PETROAN Opposes Dangote Refinery’s Fuel Distribution Plan, Warns Against Monopoly
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has raised strong objections to the distribution model adopted by the Dangote Petroleum Refinery, warning that the current approach could stifle competition and lead to monopolistic control of Nigeria’s downstream petroleum sector.
In a statement issued over the weekend, PETROAN accused the refinery of implementing policies that favour large-scale marketers and disadvantage independent retailers.
The association highlighted a major concern: Dangote’s decision to set a minimum purchase threshold of one million litres for diesel buyers.
This volume, estimated to cost over ₦1 billion at current prices, is beyond the reach of many independent marketers who lack the necessary financial support from commercial banks.
“This structure is not only unfair but strategically designed to exclude small and medium-scale marketers from the market,” PETROAN stated. “Such distribution tactics threaten to create a dangerous monopoly in the sector, which contradicts the spirit of free enterprise and healthy competition promoted by the Petroleum Industry Act.”
While the Dangote Refinery has been praised for its role in reducing Nigeria’s dependency on imported petroleum products, recent pricing actions have drawn scrutiny.
The refinery’s decision to slash its diesel price to between ₦825 and ₦990 per litre has reportedly caused significant disruptions in the market, leading to what PETROAN describes as “massive losses” for retailers who had stocked products at higher prices prior to the price cut.
Industry analysts note that while lower prices may benefit consumers in the short term, the underlying structure—particularly the concentration of distribution control—raises long-term regulatory and economic concerns.
PETROAN has called on the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Federal Competition and Consumer Protection Commission (FCCPC) to step in and monitor Dangote’s activities. The association urged the regulators to ensure that the market remains competitive and accessible to all players, including smaller marketers and independent retail operators.
According to PETROAN, a diverse sourcing framework is essential for market stability. It proposed a distribution ecosystem that includes not only the Dangote Refinery but also the Nigerian National Petroleum Company Limited (NNPC), modular refineries, and imported supplies.
This, the association argues, would encourage balanced pricing, prevent artificial scarcity, and preserve investor confidence in the sector.
This is not the first time PETROAN has flagged concerns regarding the dominance of major players in the petroleum industry. The group has previously advocated for reforms that would give room for modular refineries and ease the financial burden on independent operators. Interestingly, PETROAN had earlier entered into a partnership with Dangote and MRS Oil Nigeria Plc to improve fuel distribution, underscoring the complex and sometimes uneasy relationship between cooperation and competition in Nigeria’s evolving energy sector.
As the Dangote Refinery gears up for full-scale operations in gasoline and other products, all eyes are now on regulators to ensure that the refinery’s undeniable industrial capacity does not lead to the suppression of market diversity. PETROAN insists that a fair and open distribution network is essential for Nigeria’s energy security and economic inclusion.
