The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has confirmed plans to import premium motor spirit (PMS), commonly known as petrol, at a price lower than the current market rate in Nigeria.
In a statement issued on Monday, November 4, PETROAN emphasised that the move is part of its commitment to fostering competition in Nigeria’s deregulated petroleum market.
Dr. Joseph Obele, PETROAN’s National Public Relations Officer, stated that the group has set up a business unit that will facilitate the importation of cheaper petrol before December.
He stressed that competition is vital for ensuring fair pricing and enhancing the value consumers receive for their money.
“Intensive or aggressive competition in any market brings the best value for money exchange for a commodity. Consumers get the best value for pricing when competition is at its peak,” Obele said.
He added that any attempt to limit competition leads to exploitative pricing and profiteering.
The announcement comes as the association faces allegations from Dangote Refinery regarding the quality of products PETROAN plans to import.
Dangote Refinery had accused the marketers of intending to import substandard petrol at a cheaper rate, a claim that PETROAN strongly disputed. Obele dismissed these allegations as “typical” of the refinery’s strategy to maintain its market monopoly.
“The publication by Dangote Refinery that PETROAN will import substandard petroleum products is not coming as a surprise to stakeholders, because such is his usual gimmick for maintaining a monopoly,” Obele continued.
“PETROAN has concluded plans with its foreign refinery counterparts and financial partners to import the best quality of PMS and sell it at a far lower price than the current market rate.”
Pinnacle Oil Responds to Allegations of Blending Substandard Petrol
Meanwhile, Pinnacle Oil and Gas Limited, a key player in Nigeria’s downstream petroleum sector, has issued a response to accusations from Dangote Refinery that it, along with other entities, is involved in blending substandard petrol.
Anthony Chiejina, Group Chief Branding and Communications Officer at Dangote Group, recently claimed that an international trading company had hired a depot facility near the Dangote Refinery with plans to blend lower-quality products and flood the market with them to compete against Dangote’s higher-quality output.
He argued that this move could harm the growth of domestic refining in Nigeria.
In response, Pinnacle Oil, which operates a facility near Dangote Refinery, categorically denied these allegations. Bob Dickerman, CEO of Pinnacle Oil, stressed that his company does not engage in the blending of substandard products.
“Deregulated commodity markets work best with an open system of multiple sellers and multiple buyers bidding to establish the market price,” Dickerman said.
“For Nigeria to have supply options that include local refineries or imports is the mechanism that will establish the lowest sustainable prices. A free market is also regulated to ensure that all products meet the country’s specifications and that all players behave responsibly.”
Tensions in Nigeria’s Petroleum Market
The dispute between PETROAN and Dangote Refinery highlights ongoing tensions in Nigeria’s petroleum sector as the country navigates a period of deregulation and seeks to balance domestic refining capabilities with the need for imports.
While local refineries, including Dangote’s, are working to ramp up production, importation of refined products remains a critical aspect of meeting domestic demand.
PETROAN’s move to bring in cheaper petrol is seen as an effort to provide consumers with more affordable options amidst high petrol prices, but it has also drawn scrutiny regarding the quality of the products to be imported.
With competition in the market intensifying, the coming months could prove pivotal for Nigeria’s petroleum market and its ongoing efforts to achieve greater energy security and economic stability.
As of now, both PETROAN and Pinnacle Oil have affirmed their commitment to maintaining high standards in the petroleum sector, despite the contentious accusations.
The market will be watching closely to see how this situation unfolds as Nigeria continues to grapple with the challenges of energy supply and pricing.
