The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has announced plans to import Premium Motor Spirit (PMS) at a price lower than the current rate in Nigeria. Dr. Joseph Obele, the National Public Relations Officer of PETROAN, made the declaration on Monday in Abuja, asserting that the initiative aims to offer a more affordable alternative to the existing price structure in the country’s fuel market.
Obele emphasized that competition should be encouraged within the petroleum sector to prevent exploitation and profiteering by monopolistic players. He made the comments in response to claims from Dangote Refinery, which had alleged that PETROAN’s imported PMS would be of substandard quality and sold at a cheaper price. Obele dismissed these allegations, stating that such claims were unsurprising and part of a broader attempt to discredit the association’s efforts.
The dispute comes on the heels of an announcement by PETROAN and the Independent Petroleum Marketers Association of Nigeria (IPMAN), in which both groups stated their intention to offer PMS at a significantly lower price than the current rate. This announcement has sparked reactions, especially from key players like Dangote Refinery, which has previously dominated the market with its refining capabilities.
Dr. Obele made it clear that PETROAN had never compared the price of Dangote’s PMS with any other products, as the price of Dangote’s fuel had only been publicly revealed by the refinery on Monday. “We have never made any comparisons with Dangote’s price, as it was not made public until they released it on Monday,” Obele stated, further distancing the association from any intention to directly challenge Dangote’s pricing structure.
He also provided details on PETROAN’s plans to import PMS at a lower cost, highlighting that the association had already concluded agreements with foreign refinery partners and financial institutions to import high-quality fuel. “We have plans in place to bring in the best quality PMS and offer it at a price far lower than what is currently being sold in Nigeria,” Obele said. He added that PETROAN intends to enter the market before December 2024, contingent on receiving import permits from regulatory agencies and securing foreign exchange at the official rate from the Central Bank of Nigeria.
Obele also addressed the issue of Dangote Refinery’s pricing strategy, particularly the recently announced rate of N990 per liter. He described this price as “inconsiderate,” pointing out that Dangote Refinery had received significant concessions during the construction of its refinery, particularly in accessing foreign exchange. “The rate of N990 announced by Dangote was not considerate, given the massive concessions they received for accessing foreign exchange during the construction phase,” Obele remarked, stressing that the core factors in setting fuel prices should be based on production costs and reasonable profit margins.
The PETROAN spokesperson rejected the allegations that the association planned to import substandard products, as well as the claim that an international company was attempting to establish a PMS blending plant in Lagos. He suggested that these accusations were part of a broader strategy to push competitors out of the market and establish a monopoly. “These allegations are merely tactics to stifle competition and establish a monopoly for exploitation,” Obele argued.
Obele further explained that PETROAN’s initiative was driven by a patriotic desire to address the instability in Nigeria’s downstream petroleum sector. He noted that President Bola Tinubu’s reformative agenda aimed at liberalizing the downstream market, which would benefit consumers through more competition and better pricing. “The reformative and transformational agenda of President Tinubu is seen as a threat by those who benefit from a monopolistic market,” Obele stated. He added that such reforms are essential to build an inclusive market where consumers can benefit from competitive pricing.
The PETROAN spokesperson stressed that competition in the fuel sector would ultimately lead to better outcomes for consumers, as it would drive down prices and improve service quality. “Intensive competition in any market brings the best value for money,” he said, calling for the encouragement of more competitive practices within the sector to benefit Nigerian consumers.
Obele concluded his statement by underscoring the importance of President Tinubu’s intervention in fostering an open and competitive market. He suggested that without competition, the petroleum market would become “exploitative” and focused solely on profiteering, which would be detrimental to the public. “Without competition, the market would be exploitative, and the goal would simply be profiteering,” Obele said, reaffirming PETROAN’s commitment to offering better prices for Nigerians.
As Nigeria continues to grapple with high fuel prices and economic instability, PETROAN’s plans to import cheaper PMS and introduce more competition into the sector could have significant implications for the nation’s petroleum market.
