A spectrum of marketers across the downstream oil industry, along with industry watchers, analysts and unions have expressed concerns about the incessant price instability and uncertainty in the supply, distribution, and retailing of petroleum products across the country. This worrisome trend is creating panic in the industry.
This situation is evolving as a result of underlying structural factors bedevilling the industry over the last year.
The industry watchers raised alarm over what they described as the looming danger posed by Dangote Refinery’s single-train structure and unstable pricing regime, warning that Nigeria could be plunged into a major economic crisis if urgent corrective measures are not taken.
Speaking exclusively to the press, an array of marketers noted that Dangote Refinery’s current operational model and pricing practices are inconsistent with the amended Petroleum Industry Act (PIA) and risks destabilizing the nation’s petroleum supply chain.
Concerns Over Pricing Fluctuations
On their part Independent marketers highlighted recent confusion in the petroleum industry, noting that the refinery’s ex-depot price jumped from ₦699 to ₦799, while pump prices have epileptically jumped from ₦731 to ₦920. They described this as “epileptic pricing” that creates uncertainty for marketers and consumers alike.
Allegations of Anti-Competitive Practices
ThoseSome analysts and watchers have accused the Dangote Refinery of engaging in restrictive business practices, including monopolistic tendencies that can pose as barriers to entry for other players. They warned that such anti-competitive behaviour discourages investment, creates price wars, and ultimately undermines the sustainability of the petroleum sector.
“Petroleum is a macro product; its behavior affects all other products, including food. If competition laws and PIA provisions are not strictly enforced, businesses will collapse and the economy will suffer,” they cautioned.
They noted that Dangote’s refinery, with its 650,000 barrels per day capacity, operates as a single-train facility, meaning the entire output depends on one processing line. They explained that this design leaves the refinery vulnerable to disruptions, as any technical fault could halt production entirely.
“The catalytic unit is already down. This shows the danger of relying on a single train. Nigeria requires about 70 million litres per day according to updates by NMPDRA, but Dangote is currently supplying less than 35 million litres. This shortfall exposes the country to energy crises,” they said.
The Unions urged the federal government and the National Assembly to enforce strict compliance with PIA laws, stressing that the legislation was designed to ensure a “win-win” situation for all stakeholders in the petroleum industry.
They also noted that unless the refinery adopts a multi-train structure and pricing transparency, Nigeria’s petroleum supply-demand balance could collapse, triggering wider economic instability.
