Retailers Warn Against Dangote Refinery’s Downstream Monopoly, Say Job Losses Loom

Petroleum products retail outlet owners have raised concerns over the potential monopolistic threat posed by Dangote Refinery’s forward integration strategy in Nigeria’s downstream petroleum sector.

Speaking under the aegis of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), the outlet owners warned that the refinery’s dominance could lead to widespread job losses and undermine competition, calling on regulators to put in place robust control mechanisms to check the company’s market power.

Dangote Refinery, with its impressive production capacity of 650,000 barrels per day, is one of the largest in sub-Saharan Africa. While the refinery is expected to meet Nigeria’s domestic fuel demand and export surplus products, PETROAN insisted that its role should be confined to competing with global refineries rather than controlling the downstream distribution network within Nigeria.

National president of PETROAN, Dr. Billy Gillis Harry, who expressed deep concern about the refinery’s direct involvement in downstream operations, said, “Dangote Refinery is not just a refinery; it is aggressively moving into distribution, using its massive production capacity to dominate the market. This threatens the very existence of thousands of independent filling station operators and truck owners who have been the backbone of Nigeria’s petroleum supply chain.”

A key element of Dangote’s strategy is the introduction of 4,000 brand-new Compressed Natural Gas (CNG)-powered tankers, which PETROAN warned could displace thousands of traditional truck drivers and owners. “While CNG trucks may reduce transportation costs, the sudden shift will devastate the livelihoods of many who depend on petroleum product transportation for their income,” Dr. Harry added.

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PETROAN also highlighted Dangote’s pricing penetration tactics, where the refinery could temporarily reduce fuel prices to capture market share and push competitors out of business.

“This is a classic monopoly play. Once competitors are eliminated, prices will inevitably rise, leaving consumers at the mercy of a single dominant player,” Dr. Harry warned.

The association’s concerns extend beyond job losses. PETROAN fears that Dangote’s dominance could stifle competition, reduce market efficiency, and lead to price fixing. “We are calling on the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and the Ministry of Petroleum to step up regulatory oversight. Price control mechanisms must be established to prevent any form of monopoly that harms consumers and the economy,” Dr. Harry urged.

Moreover, PETROAN advocates for the protection and support of local modular refineries, which face existential threats from Dangote’s market power. “Local refineries are vital for economic diversification and job creation. They must be supported with adequate crude supply and fair market conditions to thrive alongside Dangote Refinery,” Dr. Harry said.

The association also dismissed claims by Dangote Refinery that imported petroleum products are substandard, describing such statements as tactics to justify market dominance and suppress competition. “Accusations against importers are unfounded and appear designed to protect a monopoly rather than ensure product quality,” he noted.

PETROAN emphasised the urgent need for a balanced approach that encourages industrial growth while protecting jobs and consumers. “Nigeria’s petroleum sector must remain competitive and inclusive. Regulatory bodies must act decisively to ensure Dangote Refinery’s expansion does not come at the expense of thousands of workers and millions of consumers,” Dr. Harry said.