Marketers decry potential monopoly as Dangote clears NNPC sole buyer of fuel

Segun Adeyemi 16:53 - 03 September 2024

Aliko Dangote on Tuesday, September 3, unveiled sample of refined petrol from the $20bn Dangote Refinery. [Getty Images]

The Dangote Refinery has slashed the price of petrol. [Getty Images]

Independent petroleum marketers have expressed concerns over Dangote Industries Limited's decision to sell its refined fuel exclusively to the Nigerian National Petroleum Company Limited (NNPCL).

This move, announced by Mr Devakumar Edwin, Vice President of Oil & Gas at Dangote Industries, has sparked fears of a potential monopoly in the downstream sector.

Edwin disclosed that the 650,000 barrels per day capacity Dangote Refinery, located in Lekki Free Zone, Lagos, is undergoing product testing, with the refined fuel expected to flow into tanks shortly.

"NNPCL is the sole importer of fuel and will buy our gasoline exclusively. If no one else is interested, we will export it, as we do with our aviation jet fuel and diesel," he stated, according to New Telegraph.

However, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has voiced opposition to this arrangement.

Chinedu Ukadike, IPMAN's National Public Relations Officer, noted that while NNPCL's investment in the refinery might influence this decision, it raises significant concerns about market competition.

"The monopoly we've been warning about is resurfacing. NNPCL has long been the sole importer of petroleum products, and now it seems they'll be the sole off-taker of Dangote's fuel. This could stifle competition in the deregulated sector," Ukadike argued, urging Dangote to consider independent marketers in its distribution plans.