PETROAN: DANGOTE'S FORWARD INTEGRATION STRATEGY AIMED AT MONOPOLY, THREATENING JOB LOSSES AND BUSINESS SHUTDOWNS.



The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has raised concerns about Dangote Refinery's forward integration adoption, warning that it could lead to a monopoly in disguise and pose a significant job loss threat to Nigeria.


With a production capacity of 650,000 barrels per day, PETROAN argues that Dangote Refinery should be competing with global refineries, not operating as a distributor in the downstream sector. This massive refinery, one of the largest in sub-Saharan Africa, is expected to satisfy domestic fuel demand and export surplus products.


PETROAN has previously raised alarms about Dangote's intentions to dominate the downstream sector, citing concerns that the company may leverage its market power to fix prices, limit competition, and exploit consumers, much like it has done in other sectors.


PETROAN warns that Dangote's tactics may include a pricing penetration strategy, where they reduce prices to capture market share, with the ultimate goal of forcing other filling station operators to quit the market. This could lead to a massive shutdown of filling stations across Nigeria, resulting in widespread job losses.


The introduction of 4,000 brand-new Compressed Natural Gas (CNG)-powered tankers by Dangote Refinery poses a significant threat to the livelihoods of thousands of truck drivers and owners. While CNG trucks may offer a lower cost of transporting petroleum products, this shift could lead to widespread job losses in the industry.


The adoption of a forward integration strategy by Dangote Refinery will greatly affect various stakeholders, including:


- Modular Refineries: Their operations and market share may be threatened by Dangote's dominance.

- Truck Owners: Job losses and reduced business opportunities may occur due to Dangote's direct supply and CNG-powered tankers.

- Filling Station Operators: Many may be forced to shut down due to Dangote's pricing penetration strategy and dominance.

- Local Suppliers of Petroleum Products: Their businesses may be negatively impacted by Dangote's direct supply to end-users.

- Telecom Diesel Suppliers: Their operations and market share may be threatened by Dangote's dominance.


It is obvious that Dangote plans to gain full monopoly of the downstream sector, which would enable the company to exploit Nigeria's petroleum consumers. This could lead to higher prices, reduced competition, and decreased economic efficiency.


The National President of PETROAN, Dr. Billy Gillis Harry, calls on the Executive Director of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Minister of State for Petroleum to put in place price control mechanisms to prevent any form of monopoly. Dr. Harry emphasizes that competition should always be encouraged to protect consumers and promote economic efficiency.


PETROAN Key Concerns:


- Monopoly: Dangote Refinery's dominance could stifle competition.

- Job Losses: The refinery's operations could negatively impact employment opportunities.

- Unfair Market Practices: PETROAN warns that Dangote Refinery's forward integration adoption could lead to anticompetitive behaviors.


PETROAN Recommendations:


- Promote Competition: Encourage a competitive refining market environment.

- Regulatory Oversight: Strengthen regulatory agencies to monitor market behavior.

- Support Local Refineries: Ensure crude oil supply to local refineries.

- Mitigate Job Losses: Explore alternative livelihoods for affected workers.


Signed: 

Dr Joseph Obele. National PRO, PETROAN.

Comments

Post a Comment

Popular posts from this blog

Search for Common Ground Trains Journalists on Peace Building

Image
A two-day training focussing on conflict sensitive reporting and Digital  Peace Building has ended in Port Harcourt with a call on journalists to sustenance of peace ahead of the 2027 General Election. The training drew participants from the traditional media, print and electronic from Port Harcourt, who are mostly members of the Nigeria Union of Journalists, attended. in his lecture, The  Mass Media  and Information Coordinator of Search for Common Ground, Mr Sunny Dada, expressed the need for the participants on the use of digital media, on the topic Digital Peace Building and Media Literacy. Mr Dada harped on the need for journalists to be up the date on the use of digital platforms in carrying out their job. He also urged everyone to be part of the peace process in Rivers State as the country moves to another General Election. He further noted that journalists are not just onlookers, but key actors in the electoral process. He added that journalists are transformative...
Read more

Nigeria Cannot Afford a One Party System

Image
  It is not a secret that the ruling APC is bent on destroying the opposition and coast home in the 2027 General Election. It has dismantled the the opposition PDP and the upcoming ADC that Nigerians fear that the 2027 elections might just be a coronation exercise despite their displeasure with the ruling party. Good for PDP, some people might say, as the then ruling party from 1999 till 2015 introduced impunity into politics. It was then a Behemoth that swallowed all-30 Governors and a trifecta majority in the House of Reps and Senate and the states. The then Chairman late Audu Ogbeh boasted of ruling for 60 years!  They were years when election results were declared in Aso Rock bedrooms and not the constitutionally empowered INEC. PDP started unravelling when the courts had the balls to cancel daylight robberies starting from Anambra State, where Dr Chris Ngige was removed for Peter obi to move in. Ondo, Ekiti, Edo and Osun followed suit.  Today, we have staggered gover...
Read more

FIFA U20 World Cup: Argentina Await Flying Eagles Battle in Round of 16

Image
  The Flying Eagles of Nigeria will take on Argentina in the round of 16 of the ongoing FIFA U-20 World Cup in Chile. The Nigerian lads finished third in Group  to earn a place as one of the best losers after a pulsating 1-1 draw against Colombia early Monday morning. Captain, Daniel Bameyi scored from the penalty spot for his consecutive penalty goal to rescue a point against Colombia, who had scored earlier. Seven-time African champions Nigeria put up an impressive performance against Colombia in the early hours of Monday to reach the Round of 16 of the ongoing FIFA U20 World Cup finals in Chile.   Goalkeeper Ebenezer Harcourt made big saves in the 23 rd  and 26 th  minutes to keep the scoreline pristine in Talca, but the Flying Eagles were the more adventurous side as they hit the upright on a number of occasions, with Tahir Maigana, Kparobo Arierhi and Suleman Sani in full flow for large swatches of the encounter.   Colombia went ahead in the 51 st ...
Read more