The Petroleum Products Retail outlets Owners Association of Nigeria (PETROAN) has countered Dangote Refineries and Petrochemicals Plc over its pricing of Premium Motor Spirit (PMS) popularly known as fuel, and the allegation that PETROAN imports substandard fuel into the country.
PETROAN claimed that currently, imported petroleum products cost less than those from Dangote Refineries.
Further, PETROAN alleged that Dangote’s move to stop importation of petroleum products is targeted at creating monopolistic empire to himself in determining prices of petroleum products in petroleum sector rather than allowing free market enterprise to dictate prices in the country.
PETROAN made these claims in a statement on Monday with title “Dangote PMS price as released yesterday was surprising. PETROAN will sell far lesser than the current selling rate of PMS in Nigeria, when granted Import License by NMDPRA”. The statement was signed by PETROAN National Public Relations Officer, Dr. Joseph Obele and made available to Journalists.
OPTIMUM TIMES recalled that the President of Dangote Group, Aliko Dangote, had alleged importation of fake petroleum products and asked the federal government to stop all organizations, including the Nigeria National Petroleum Company Limited (NNPC Ltd) from importing petroleum products. It claimed that it has enough to sell.
But PETROAN said: “Intensive or aggressive Competition in any market brings the best value for money exchange for a commodity. Consumers gets the best value for pricing when Competition is at its peak, hence Competition should be encouraged. Contrarily to Competition, such a market will be exploitative and strictly for profiteering.
“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 usual gimmick for maintaining monopoly.
“The publication was coming after PETROAN and IPMAN announced plans to sell far lesser than the current Selling rate of PMS in Nigeria.
“It is important to set the records straight that PETROAN has never compared the price of Dangote PMS with any other on the fact that Dangote’s PMS price wasn’t known until this morning at the press release by Dangote Refinery
“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.
“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 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 lesser.
“The rate of #990 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.”
PETROAN accused Dangote of striving to push others out of the market to create monopoly for himself.
PETROAN insisted that Dangote ought not determine his price of PMS in Nigeria based on international market price after receiving yet to be disclosed foreign exchange incentives from the Central Bank of Nigeria (CBN) while his refinery was under construction.
It further cited that Chinese goods prices are not determined by international market prices but by cost of production and some margin of profits. PETROAN wondered why Dangote cannot do same to Nigerians whose government gave him lots of incentives.
The full text of PETROAN statement reads:
DANGOTE PMS PRICE AS RELEASED YESTERDAY WAS SURPRISING.
“PETROAN WILL SELL FAR LESSER THAN THE CURRENT SELLING RATE OF PMS IN NIGERIA, WHEN GRANTED IMPORT LICENSE BY NMDPRA”
Petroluem Products Retail outlets Owners Association of NIgeria PETROAN has successfully incorporated a Strategic Business unit called PETROL.
PETROAN’s drive was solution-centric and patriotism following the pricing instability and turbulences in the downstream sector.
The reformative and Transformational agendas of President is seen as inimical to
advocates and beneficiaries of monopolistic market. The President Interventions was meant to liberalise the downstream sector by building an all inclusive market.
Intensive or aggressive Competition in any market brings the best value for money exchange for a commodity. Consumers gets the best value for pricing when Competition is at it’s peak, hence Competition should be encouraged. Contrarily to Competition, such a market will be exploitative and strictly for profiteering.
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 usual gimmick for maintaining monopoly.
The publication was coming after PETROAN and IPMAN announced plans to sell far lesser than the current Selling rate of PMS in Nigeria.
It is important to set the records straight that PETROAN has never compared the price of Dangote PMS with any other on the fact that Dangote’s PMS price wasn’t known until this morning at the press release by Dangote Refinery
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.
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 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 lesser.
The rate of #990 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.
Goods from the China markets are not selling as high like goods from the America market because cost of production differs.
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 view of 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”.
PETROAN uses this medium to commend Mr President for his commitment towards the revamping of the nation owned refineries. It is on record that the ongoing rehabilitation project never suffers funding Under President Tinubu as it was earlier.
We will still maintain our position by counselling 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 will enable the Operators of the government owned refineries to withstand aggressive ballistic Competition that will be poise by the known beneficiaries of monopolistic
market.
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 in view of acquiring their facilities, because such market will be a Monopolistically orchestrated market in view 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 in view of crashing the current selling rate of PMS.
The only catalyst to trigger PMS price reduction is by ushering in
Competition and PETROAN will support the Federal government in achieving intensive competition in the sector.
Most importantly, the Solution to the ongoing downstream sector Pricing turbulence and instability is for Mr President to midwife or delegate an all inclusive Stakeholders
Meeting including DAPPMAN, MEMAN, PETROAN, IPMAN NUPENG and PENGASSAN.
This meeting tends to get first hand valuable inputs from the industry
players in view of having a final solution for PMS pricing in the downstream sector.
Dr. Joseph Obele.
NATIONALPRO,
PETROAN
