Petrol Retailers Seek Quick Revamp of FG-owned Refineries to Enhance Competition

• Urge government to guarantee adequate crude supply to all refiners 

•Say Dangote’s pricing of products in dollars highlight single supplier risks

The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) yesterday called on the federal government to immediately restore the country’s state-owned refineries to full commercial operation, arguing that a competitive refining landscape is critical to ensuring price stability, strengthening energy security and reducing pressure on the naira.

The association also urged the government to guarantee adequate crude oil supply to all domestic refiners, saying Nigeria’s downstream petroleum market should not depend on the fortunes or pricing decisions of a single refinery.

In a statement yesterday, PETROAN President, Dr. Billy Gillis-Harry, said while the association supports the deregulation of the downstream sector and respects the commercial decisions of all licensed refinery operators, including the Dangote Petroleum Refinery, the structure of the market requires urgent attention.

According to him, the recent decision by the Dangote refinery to price petroleum products in United States dollars highlighted the risks associated with having a market dominated by a single supplier.

He argued that marketers earn revenue in naira and would be exposed to exchange rate volatility if forced to source foreign exchange to purchase products, with the attendant impact on pump prices.

Gillis-Harry maintained that although pricing in dollars was a legitimate commercial decision, Nigeria required a diversified supply base to shield consumers and the economy from currency shocks and supply disruptions.

Drawing comparisons with countries such as Mexico and Indonesia, he noted that both nations introduced reforms to reduce dependence on dominant refining entities and encourage competition, adding that the common lesson from global experience is that markets built around a single supplier remain vulnerable to instability.

“The recent move by Dangote Petroleum Refinery to price its products in United States dollars was, on its face, a commercial choice within a company’s rights. But it has done something more consequential than adjusting an invoice. It has exposed, with unusual clarity, what happens when a domestic market’s price mechanism becomes dependent on a single actor’s exchange-rate calculus,” the organisation argued.

Gillis-Harry stressed that refining capacity alone does not guarantee competition, insisting that multiple refiners operating within the same market provide the checks and balances necessary for efficient price discovery and consumer protection.

The PETROAN president therefore called for the temporary resumption of operations at the Port Harcourt, Warri and Kaduna refineries pending the conclusion of discussions on their long-term rehabilitation, describing the move as a practical bridge towards a more competitive refining industry rather than a substitute for broader reforms.

According to him, even partial production from the government-owned refineries would improve supply, moderate pricing behaviour and strengthen Nigeria’s energy security by reducing reliance on a single refining source.

PETROAN listed the benefits of restarting the facilities to include creating a price-check mechanism, promoting genuine competition among refiners, reducing demand for foreign exchange through increased local refining, strengthening national energy security by diversifying supply sources and restoring investor confidence in Nigeria’s downstream petroleum sector.

“PETROAN’s position rests on a principle familiar to anyone who has studied market concentration in essential goods: capacity is not the same as competition. Saudi Arabia’s Aramco is, by any measure, one of the most efficient refining operations in the world, and yet the Kingdom has continued investing in diversified downstream capacity domestically and through joint ventures abroad, precisely because efficiency at scale does not substitute for the disciplining effect of multiple suppliers competing for the same customer. Scale solves for cost. It does not solve for the leverage a single supplier holds over price.

“This is the case PETROAN is making for the Port Harcourt, Warri, and Kaduna Refineries. These facilities were operational before their shutdown in May 2025, and PETROAN’s request is comparatively modest, not full rehabilitation overnight, but a temporary resumption of production while discussions with prospective Chinese technical partners proceed. It is a bridge, not a substitute for reform,” the group maintained.

The association further urged the federal government to sustain policies that encourage investment across the refining value chain, including modular refineries, while ensuring that all domestic refiners have equitable access to crude oil feedstock.

It argued that Nigeria’s long-term energy security would depend on building a resilient refining industry driven by multiple public and private operators rather than concentrating supply in one facility.

PETROAN reaffirmed its support for ongoing downstream reforms but maintained that restoring the country’s existing refineries to operation remains the quickest and most practical step towards achieving a competitive, resilient and affordable petroleum products market.