By Abiola Olawale
The tussle between the Dangote Refinery, owned by Africa’s richest man and business mogul, Alhaji Aliko Dangote and the petroleum marketers has continued to escalate.
This is as the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) bombed Dangote for allegedly trying to suppress competitors in the downstream sector.
The New Diplomat reports that following the production of the Premium Motor Spirit (PMS), also known as petrol, by the Dangote refinery, there has been a huge debate between oil marketers and the company.
On November 1, the Independent Petroleum Marketers Association of Nigeria (IPMAN) said petrol from the refinery is purportedly expensive than buying from other sources.
The National Assistant Secretary of the IPMAN, Yakubu Suleiman, who spoke with the press said the group’s members opt for more affordable options at other depots across Nigeria than the high logistical costs associated with buying petrol from the Dangote refinery.
However, in a press statement issued on Monday, Dangote refinery rejected the claim, saying the price of its petrol is far cheaper than the imported ones.
The company said its ex-depot price of petrol is N990 per litre for trucks and N960 per litre for ships.
Dangote refinery also said its prices are benchmarked against not just international prices but also the amount the Nigerian National Petroleum Company (NNPC) Limited sell to local marketers.
The refinery also added that any oil marketer that sells petrol cheaper than the price it is offering is importing substandard products into Nigeria.
Reacting to the statement, the PETROAN spokesperson, Joseph Obele, said the accusation of importing substandard products by Dangote refinery is “his usual gimmick for maintaining monopoly”.
Obele, in a press statement, maintained that consumers get the best value for pricing when competition is at its peak, hence competition should be encouraged.
The statement reads in part: “PETROAN has concluded plans with her foreign Refinery counterparts and financial partners to import the best quality of PMS and then sell far less than the present selling rate of PMS in Nigeria.
“We planned 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 CBN at the official rate.
“Before now, Dangote Refinery has refused to make public her selling rate of PMS until IPMAN and PETROAN announced readiness to sell less.
“The rate of #990 as announced by Dangote refinery was inconsiderate based on the fact Dangote Refinery enjoyed massive concession for accessing foreign exchange during the construction of the refinery.”
PETROAN further argued that the core determinant for setting the price is the cost of production and 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 experts, such a country Pricing template shouldn’t have been templated by the selling rate at the international market, but rather it should have been the cost of production plus a fair margin.
“Goods from the Chinese markets are not selling as high as goods from the American market because the cost of production differs.
“The allegations that PETROAN will import inferior Products and also saying 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 view achieving monopoly for exploitation,” the statement added.
