Petrol Marketers Cry Out Against Monopoly, Unfair Practices as Ex-Depot Price Falls
- PETROAN issued a warning against unfair competition and monopolies in the downstream oil industry
- To reduce price volatility and protect investment, they underlined the necessity of more regulatory participation
- This came after the retail price at Dangote-affiliated filling stations fell from N925 to N860
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Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) issued a warning yesterday against monopolies and unfair competition in the downstream oil sector amid the fierce price war in the petroleum industry.
Source: Getty Images
They emphasized the need for more robust regulatory involvement to curb price volatility and safeguard investment, even as he called for vigorous competition.
The petrol marketers spoke in light of the recent price reductions for premium motor spirit (PMS), commonly referred to as gasoline, by the Nigerian National Petroleum Company Limited (NNPCL) and the Dangote Refinery.
Price battle intensifies
After the Dangote Refinery announced a N65 ex-depot price reduction, the retail price at Dangote-affiliated filling stations fell from N925 to N930 to N860.
As the two major competitors' price battle intensified, the NNPCL likewise lowered its prices at its retail stations.
In order to avoid monopolies and safeguard regional refineries, PETROAN, through its National Public Relations Officer, Dr. Joseph Obele, issued a statement urging regulatory bodies to encourage healthy competition and price stability in the nation's downstream petroleum sector.
“The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has taken a firm stance on promoting healthy competition and controlling price fluctuations in the downstream sector,” he said.
He claimed that enormous losses of billions of naira were caused by the current price decline.
Source: Getty Images
The PETROAN said,
“The association stressed that the sudden downward review of prices has resulted in massive losses, with those affected counting their losses in billions of naira. This situation poses a significant fear for further investment in the sector, as investors are wary of unpredictable market conditions.
“Moreover, the threat of price fluctuations is affecting the business boom of the sector, which will definitely lead to retrenchment. This will have far-reaching consequences, including job losses and economic instability.
“To address these challenges, PETROAN proposed that regulatory authorities establish mechanisms to encourage price stability for at least six months. This approach will help reduce the uncertainty and risk associated with investments in the sector, ultimately promoting economic development and protecting the interests of consumers and Nigerians.”
Obele emphasized the importance of having a variety of supply sources, such as imports, NNPC refineries, modular refineries, and the Dangote Refinery.
According to the group, a varied supply base would promote competition between domestic and foreign petroleum products, guaranteeing reasonable prices and protecting the market from abuse.
Importers begin negotiating reduction
Legit.ng reported that Importers are fighting to stay afloat and looking for alternative markets to offset growing losses as NNPC Retail Ltd. and Dangote Refinery engage in fierce competition that pushes down petrol prices.
As the operating space becomes more erratic, companies are reconsidering their methods to maintain operations in the face of declining margins and unstable global dynamics, according to information obtained by Daily Sun.
Marketers have been caught off guard by the market turmoil and are dealing with big and unexpected losses, according to sources, particularly those who have large stocks in their tank farms and impending gasoline cargoes.
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Source: Legit.ng
