Mohammed Shosanya
The Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN),has accused Dangote Refinery of employing its usual gimmick to maintain monopoly over other competitors in the petroleum market.
It strengthened its position with the latest Dangote Refinery’s allegation that the association plans to import cheaper and substandard petroleum products into the country.
PETROAN’s spokesperson,Dr. Joseph Obele,conveyed this in a statement on Monday and emphasized his the association’s commitment to providing high-quality products at competitive rates, contrasting with Dangote’s pricing strategy, which they argue is not aligned with local production costs.
The statement quoted that the publication by Dangote refinery that PETROAN will import sub standard petroleum product is not coming as a surprise to stakeholders, because such is his owner’s usual gimmick for maintaining monopoly.
The publication,it said, after PETROAN and IPMAN announced plans to sell far lesser than the current Selling rate of PMS in Nigeria.
The statement also said that, PETROAN has never compared the price of Dangote Refinery’s PMS with any other on the fact that Dangote’s PMS price wasn’t known earlier.
According to the statement,”PETROAN has concluded plans with her foreign Refinery counterparts and financial partners to import the best quality of PMS and then sell far lesser than the present selling rate of PMS in Nigeria.
It disclosed that the association plans to enter the market before December 2024, pending the approval of our import permit license by the regulatory agency and access to foreign exchange from Central Bank of Nigeria at the the official rate.
It added:”Before now Dangote Refinery has refused to make public her selling rate of PMS until IPMAN and PETROAN announced readiness to sell lesser.
“The rate of N990 as announced by Dangote refinery was inconsiderate base on the fact Dangote Refinery enjoyed massive concession for accessing foreign exchange during the construction of the refinery.
“The core determinant for setting price is consideration for cost of production then add a fair margin. But this wasn’t the case for the determinant of PMS price by Dangote refinery as they said” the parameter was comparison with the international selling rate at the global market.
“A nation that gave you a yet to be disclosed concession for foreign exchange which was highly criticised by financial expert’s, such a country Pricing template shouldn’t have been templated by the selling rate at the international market but rather it should have been cost of production plus fair margin.
“The allegations that PETROAN will import inferior Products and saying also that an international company is trying to establish a PMS blending plant in Lagos are all strategies for Dangote Refinery to push others out of the market in of view achieving monopoly for exploitation.
“Few months ago the CEO of Dangote Refinery said NNPC LTD was importing inferior petroleum products, that his own was far better than what NNPC LTD was selling to marketers.
“In another press conference he said the Refinery at Malta was just a blending plant and not a Refinery. All the allegations are with the Objectives of closing the doors for other Operators so to enjoy monopoly.
“Evidences available showed that diesel (AGO) as a deregulated product was selling less than #800 in Nigeria market few weeks before the commencement of AGO production by Dangote Refinery, at the entrance of AGO market by Dangote refinery we witnessed a rapid surge above #1,000 as against the the perception of a “salvaging refinery”.
The statement commended President Bola Tinubu for his commitment towards the revamping of the nation owned refineries,adding that the ongoing rehabilitation project never suffers funding under President Tinubu as it was earlier.
The association advised that the Port Harcourt and Warri Refinery plant after rehabilitation should immediately be privatised and handled over to a reputable firm that has the Technical capability, managerial skills and financial strength in partnership with PETROAN and other critical stakeholders.
This,it said,will enable the operators of the government-owned refineries to withstand aggressive competition that will be posed by the known beneficiaries of monopolistic market.
It added:”Antecedents of the beneficiaries of monopolistic market has showed numerous suffocating business owners crashing out of other sectors for a sole operator in the past.
“Stakeholders concerns is a prayer that the process of the privatisation should be transparent using the Indorama Petrochemicals as a model as against Maintenance Repairs And Operations (MRO) contract Business scholars have described the red ocean strategy as a situation when companies try to outperform their rivals to grab a greater share of existing demand.
“While some other business scholars argued that it is detrimental to adopt the red ocean strategy with the motive for making your competitors quit inview of acquiring their facilities, because such market will be a monopolistically orchestrated market inview of exploiting the people.
“A balance market should be an all inclusive market players where the market leader is enjoying his lead, while the market challenger is servicing a certain degree of the consumers and the market followers are still surviving in the market at affordable price
“Therefore, it is penitent that Federal Government should discourage and dismantle any attempt of monopoly in the downstream sector inview of crashing the current selling rate of PMS”.