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The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) has released a 14-day review of Dangote Refinery’s Compressed Natural Gas (CNG) trucks operation, highlighting what it described as 10 critical impacts on the downstream petroleum sector.
In a statement signed by its National PRO, Dr. Joseph Obele, PETROAN warned that the operations, though groundbreaking, have created ripple effects that could destabilize existing market structures if not urgently addressed.
PETROAN said the influx of thousands of CNG trucks into Lagos has worsened traffic congestion, increasing travel times, lowering productivity, and raising logistics costs.
The review found that registered dealers sold out stock within a short period due to discounted prices, leading to panic buying and stockouts, a development PETROAN linked to weak inventory planning.
The association criticized the refinery’s decision to transact in foreign currency rather than the Naira, warning it could fuel economic hardship, contradict the government’s Naira for Crude campaign, and undermine the local currency.
Independent stations selling non-Dangote products recorded poor sales due to a ₦20 price difference, raising concerns about unfair competition and long-term sustainability.
PETROAN said private depots are laying off staff due to reduced patronage, with some reportedly putting their facilities up for sale. The association also reported widespread job cuts among its members, with several retail stations shutting down or being sold off.
PETROAN warned of looming bankruptcy among marketers, truck owners, and retailers, raising fears of a possible collapse of the downstream supply chain.
The association cautioned against viewing Dangote Refinery as a messiah, warning that a monopoly could stifle competition, innovation, and consumer choice.
According to PETROAN, dollar-based sales risk worsening exchange rate pressures, driving up import costs and further weakening the Naira. The group faulted Dangote Refinery for insufficient engagement with industry stakeholders, saying this could fuel mistrust and conflict in the sector.
To mitigate these challenges, PETROAN recommended that: Dangote Refinery should reconsider selling products in Naira to support economic stability. The company should engage stakeholders in dialogue for mutually beneficial solutions.
Government must monitor the market to prevent monopolistic practices, PETROAN and Dangote Refinery should collaborate on inventory management to curb stockouts. Support should be provided for marketers, truck owners, and retailers to avoid bankruptcy.
The Naira for Crude policy should be fully implemented to conserve foreign exchange. Government-owned refineries should be repaired and handed to competent private operators for efficient management.
Dr. Obele stressed that PETROAN remains committed to collaboration but urged government and industry players to act quickly to prevent widespread economic disruption.
