The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has announced that the price of Premium Motor Spirit (PMS) it plans to import will be cheaper than the current rates being charged in the country, indicating a shift in the pricing landscape for fuel in Nigeria.
This statement was made by Dr. Joseph Obele, the National Public Relations Officer of PETROAN, in a statement released on Monday in Abuja. Obele emphasized that fostering competition within the sector is essential to prevent exploitation and excessive profiteering from consumers.
In response to recent allegations from Dangote Refinery claiming that PETROAN intended to import substandard products at lower prices, Obele dismissed these accusations, stating that such claims were not surprising. He highlighted that PETROAN's commitment has always been to ensure the delivery of high-quality products to the Nigerian market.
The announcement follows a recent declaration by both PETROAN and the Independent Petroleum Marketers Association of Nigeria (IPMAN), revealing plans to offer PMS at rates significantly lower than the existing prices in Nigeria, which has stirred interest and concern among market players.
Dr. Obele explained that PETROAN had never compared its pricing to that of Dangote Refinery since the price of Dangote's PMS was not publicly available until it was released by the refinery on Monday. He reassured that PETROAN had finalized arrangements with foreign refinery partners and financial backers to import the highest quality of PMS, intending to sell it at prices considerably lower than the current rates in Nigeria.
“Our target is to enter the market before December 2024, contingent upon the approval of our import permit license by the regulatory agency and obtaining access to foreign exchange from the Central Bank of Nigeria at the official rate,” he stated, emphasizing the importance of regulatory compliance and financial accessibility in their operations.
Obele criticized the announced rate of N990 per liter by Dangote Refinery, labeling it as inconsiderate, especially given that Dangote had previously benefited from significant concessions for accessing foreign exchange during the construction of the refinery. He stated, “The core determinant for setting prices should consider production costs and include a fair profit margin.”
Additionally, he characterized the allegations suggesting that PETROAN would import inferior products as attempts to stifle competition and push other players out of the market. This tactic appears to be aimed at establishing a monopoly that could lead to exploitation of consumers.
“PETROAN’s objective is solution-centric and patriotic, driven by the need to address pricing instability and challenges within the downstream sector,” he asserted, highlighting the organization's commitment to contributing positively to the market dynamics in Nigeria.
Obele referenced the reformative and transformational agenda of President Tinubu, indicating that it appears to threaten those who advocate for and benefit from a monopolistic market structure. He explained that the President's initiatives are designed to liberalize the downstream sector by creating an inclusive market environment where competition thrives.
“Intensive competition in any market is key to delivering the best value for consumers. When competition peaks, consumers benefit from the best pricing for commodities,” he added, reiterating the need to promote competitive practices in the fuel sector.
“In contrast, a lack of competition leads to exploitative practices aimed solely at profiteering,” he concluded, reinforcing the importance of maintaining competitive dynamics to ensure fair pricing for consumers in Nigeria’s fuel market.
NAN