The Petroleum Products Retail Outlets Owners Association of Nigeria has called on the federal government to restore the country’s state owned refineries to full commercial operation, arguing that Nigeria’s downstream market has become too dependent on the pricing decisions of a single dominant refiner.
In a statement, PETROAN President Billy Gillis Harry said the association supports downstream deregulation and respects the commercial decisions of every licensed operator, including Dangote Petroleum Refinery, but the market’s structure now demands urgent attention. He pointed directly to Dangote’s recent decision to price petroleum products in US dollars as evidence of the risk that comes with relying on one dominant supplier, since marketers earn in naira and would face exchange rate exposure sourcing dollars to buy product, exposure that ultimately hits pump prices. While pricing in dollars is a legitimate commercial choice, he argued, Nigeria needs a diversified supply base to shield consumers and the economy from currency shocks and supply disruptions, drawing comparisons to Mexico and Indonesia, both of which introduced reforms specifically to reduce dependence on dominant refining entities, a lesson he said applies universally: markets built around a single supplier stay 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, the association said, 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.
Gillis Harry stressed that refining capacity alone does not guarantee competition, arguing multiple refiners operating in the same market provide the checks and balances needed for efficient price discovery and consumer protection, and called for a temporary resumption of operations at the Port Harcourt, Warri and Kaduna refineries while long term rehabilitation discussions continue, describing it as a practical bridge rather than a substitute for broader reform. Even partial production from the government owned refineries, he argued, would improve supply, moderate pricing behaviour and strengthen energy security by reducing reliance on one refining source, listing the benefits as a price check mechanism, genuine competition among refiners, reduced foreign exchange demand through greater local refining, diversified supply sources and restored investor confidence in the downstream sector. PETROAN’s position rests on a principle familiar to anyone who has studied market concentration in essential goods, the association said, capacity is not the same as competition, pointing to Saudi Arabia’s Aramco, one of the most efficient refining operations in the world, which nonetheless continues investing in diversified downstream capacity domestically and 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, the group said, arguing this is exactly the case for Port Harcourt, Warri and Kaduna, facilities that were operational before shutting down in May 2025, with PETROAN’s request comparatively modest, not full rehabilitation overnight but temporary resumption of production while discussions with prospective Chinese technical partners continue.
The association also urged government to sustain policies encouraging investment across the refining value chain, including modular refineries, while ensuring all domestic refiners get equitable access to crude feedstock, arguing Nigeria’s long term energy security depends on a resilient refining industry built around multiple public and private operators rather than supply concentrated in one facility, while reaffirming its support for ongoing downstream reform and maintaining that restoring existing refineries remains the fastest, most practical route to a competitive, resilient and affordable petroleum products market.
