Retailers say multiple suppliers are needed to strengthen competition, ease foreign exchange pressure and protect consumers from supply disruptions
By Heapnews
Nigeria’s petroleum retailers have called on the federal government to immediately resume commercial production at state-owned refineries, warning that dependence on a single dominant supplier could leave the country vulnerable to price and supply shocks.
The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) said restarting the Port Harcourt, Warri and Kaduna refineries would provide competition in the downstream petroleum market and serve as a check on the pricing power of any dominant supplier.
PETROAN’s National President, Billy Gillis-Harry, said the association supported deregulation and respected the commercial rights of licensed refinery operators, including the Dangote Petroleum Refinery, but said Nigeria needed a more diversified supply base.
The association said a recent move by the Dangote refinery to price petroleum products in U.S. dollars highlighted the risks of a market heavily dependent on one supplier, particularly for marketers who earn revenue in naira.
“If they must now source dollars to secure product, every fluctuation in the exchange rate becomes a fluctuation in pump prices, and every scarcity of foreign exchange becomes a scarcity of fuel,” PETROAN said in a statement signed by its National Public Relations Officer, Joseph Obele.
PETROAN said restarting government-owned refineries, even at partial capacity, could provide an alternative source of supply while talks with prospective technical partners continued.
It said multiple operational refineries would promote price competition, reduce pressure on foreign exchange, strengthen energy security and improve investor and public confidence in Nigeria’s downstream petroleum reforms.
The association also urged the government to guarantee adequate crude oil supply to all domestic refiners and maintain policies that encourage investment in conventional and modular refineries.
“Nigeria’s energy security cannot rest on the fortunes, or the currency preferences, of a single refinery, no matter how large,” PETROAN said.
The association said public and private refining capacity should operate side by side to create a more competitive and resilient petroleum market.