The Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) issued a three-day warning of a suspension of petroleum product lifting and dispensing, starting Tuesday. This action, according to PETROAN’s National President, Billy Gillis-Harry, is a proactive measure to advocate for fair competition and prevent monopolies within the petroleum sector. The move comes in solidarity with the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG), which announced a nationwide strike beginning Monday, September 8th. NUPENG’s strike protests what it terms anti-union labor practices related to the Dangote Refinery’s direct distribution of petroleum products using newly imported Compressed Natural Gas (CNG) trucks. While Dangote’s strategy aims to cut logistics costs, boost energy efficiency, and contribute to Nigeria’s economic growth, NUPENG and PETROAN perceive it as a threat to existing industry players and jobs.
PETROAN emphasized the legality and peaceful nature of NUPENG’s strike, highlighting their shared commitment to protecting workers’ rights and ensuring a stable petroleum sector. Concerned about the potential impact on consumers, Gillis-Harry called on key government officials, including President Bola Tinubu, the Minister of State for Petroleum, and the head of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), to intervene and avert the looming crisis. He also appealed to the Group CEO of the Nigerian National Petroleum Company Limited (NNPC), the Director-General of the Department of State Services (DSS), and the Inspector General of Police to intervene, emphasizing the potential hardship the disruption could cause citizens. The crux of the issue is the perceived threat of Dangote Refinery’s direct-to-consumer approach monopolizing the market, potentially displacing existing players like private depot owners, modular refinery operators, marketers, retail owners, truck owners, and drivers, leading to massive job losses and economic disruption.
PETROAN’s statement underlines the interconnectedness of the planned actions. Since many pump attendants at PETROAN member stations are also NUPENG members, NUPENG’s strike would inevitably impact retail operations. Gillis-Harry issued a clear directive to filling station owners, prohibiting them from penalizing or dismissing any pump attendants absent due to the strike. This reinforces PETROAN’s solidarity with NUPENG and reflects their shared concerns. The association had previously advocated for a competitive oil and gas sector, cautioning against the potential dangers of Dangote Refinery’s aggressive business strategy. They fear that this strategy could lead to a monopoly, similar to what occurred in the cement industry, with potentially devastating consequences for the wider Nigerian economy.
The concerns voiced by PETROAN highlight the potential disruption to the downstream sector of the oil and gas industry. The fear is that Dangote Refinery’s direct distribution model could displace a vast network of existing businesses and workers, from truck drivers and depot owners to retail outlet operators. This could lead to significant job losses and destabilize the livelihoods of many Nigerians. PETROAN’s comparison to the cement industry serves as a warning of the potential consequences of allowing one company to dominate the market, recalling a similar situation where Dangote Cement gained a substantial market share.
PETROAN, in its efforts to mitigate the impending crisis, held an emergency meeting where they resolved to engage in further consultations. If these consultations prove unsuccessful, PETROAN has pledged to support its members and their employees. The association pledged not to dismiss any employee participating in the strike and plans to deploy a 120-member compliance team to oversee and ensure the safety of its members’ facilities during the period of disruption. This demonstrates PETROAN’s commitment to protecting its members’ interests and preventing any retaliatory actions against workers exercising their right to strike. The formation of the compliance team highlights the seriousness of the situation and the potential for unrest or disruption at retail outlets.
PETROAN’s proactive stance highlights its commitment to fair competition and its concern for the well-being of its members and the wider Nigerian economy. The association views itself as a key stakeholder in the oil and gas sector and emphasizes its role in ensuring a conducive environment for workers, fostering sector growth, and ultimately benefiting the Nigerian economy. Their call for government intervention underscores the need for regulatory oversight and policy frameworks that promote healthy competition and prevent monopolistic practices. The three-day warning serves as a critical window for dialogue and negotiation, aiming to avert the potential economic hardship that the combined actions of NUPENG and PETROAN could inflict on Nigeria.
The standoff between established players in the oil and gas sector, represented by PETROAN and NUPENG, and the new entrant, Dangote Refinery, raises important questions about market competition, regulation, and the future of the industry. The situation underscores the need for a balanced approach that encourages innovation and efficiency while safeguarding the interests of existing businesses and workers. The coming days will be crucial in determining the outcome of this dispute and its impact on the Nigerian economy. The government’s response will be a key factor in shaping the future landscape of the petroleum sector.
