The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has announced plans to import premium motor spirit (PMS), or petrol, at a lower price than what is currently available in Nigeria, aiming to increase competition in the market. PETROAN’s National Public Relations Officer, Dr. Joseph Obele, emphasized that an open, competitive market is crucial in a deregulated environment to offer consumers fair prices. According to Obele, PETROAN has established a new business unit and plans to begin importing petrol by December.
This announcement follows recent tensions with Dangote Refinery. Dangote’s team suggested that some marketers, including PETROAN, might import substandard products at lower prices, potentially undercutting the refinery’s high-quality offerings. PETROAN dismissed these accusations as part of Dangote’s strategy to maintain a monopoly, stating that its imports would adhere to top-quality standards.
Pinnacle Oil and Gas Denies Involvement in Substandard Blending
Nearby Pinnacle Oil and Gas Limited, another key player in Nigeria’s downstream sector, was also implicated in Dangote Refinery’s claims. Dangote’s spokesperson, Anthony Chiejina, expressed concerns about “an international trading company” operating close to Dangote Refinery allegedly preparing to blend substandard products. Chiejina warned that such practices could harm Nigeria’s local refining industry, arguing that it’s common for countries to protect domestic industries by imposing tariffs to promote job creation and economic growth.
Pinnacle, however, firmly denied any involvement in blending inferior petroleum products. CEO Bob Dickerman stated that Pinnacle adheres to strict regulations, ensuring all products meet national standards. He emphasized the importance of a free market with multiple buyers and sellers to foster healthy competition, adding that Nigeria’s market will benefit most from a system that includes both domestic refining options and imports.
Advocating for Competition in Nigeria’s Oil Sector
PETROAN underscored that allowing multiple importers to operate freely would drive prices down for consumers. Obele argued that while monopolies tend to inflate prices for profit, open competition is essential to deliver fair value. PETROAN expressed confidence in its plan to work with reputable international refineries to source high-quality PMS, ensuring these imports would meet stringent standards and be competitively priced.
This controversy underscores a broader issue in Nigeria’s oil sector: the debate over balancing local refining with fair competition. As PETROAN moves forward with its import plans, and with Dangote Refinery as a major domestic producer, Nigeria’s fuel market may witness increased competition, potentially benefitting consumers through lower prices and better service options.
