THE Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) said a large chunk of its business would be disrupted when the Dangote Refinery implements its new nationwide market distribution plan.

PETROAN fears arose from Dangote Refinery’s proposed nationwide distribution plan at a significantly subsidised rate to major dealers and certain filling station retail outlets, which would eliminate the market distribution network that PETROAN, as a major supplier, services.

On Sunday, June 15, the Dangote Petroleum Refinery announced plans to begin a nationwide targeted distribution of premium motor spirit (PMS) and diesel to major retail outlets across the country.

The distribution is to serve marketers, petrol dealers, manufacturers, telecoms firms, aviation, and other large users across the country.

It is to commence on August 15, and according to the oil giant, it has procured 4,000 brand-new compressed natural gas (CNG)-powered tankers to ensure smooth take-off of the scheme.

It has also invested in CNG stations, supported by a fleet of over 100 CNG tankers across the country to ensure seamless distribution of the products.

But reactions from stakeholders in the sub-sector show that the Dangote Refinery’s decision has not gone down well with them.

In a chat with The ICIR on Wednesday, June 18, the national president of Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, expressed worry that the Dangote Refinery plan would disrupt the operations in the oil and gas value chain.

He said, “If one company that is as massive as the Dangote Petroleum Refinery Limited is now going to refine, store, transport, and ensure that retail outlets have products, by the overview, it will look like a very attractive thing, but it is going to kick businesses out of the way.

“It is going to create so many job losses. That is the concern we are expressing.”

Gillis-Harry, who sees this as a distortion to the entire value chain, noted that stakeholders within the sub-sector have earlier recommended that refiners should be allowed to refine and storage facilities owners to store for adequate energy security in all areas of petroleum products.

He said it was also recommended that distributors and logistics operators should be allowed to do their work both marine and land, and that marketers should supply the products while retail outlets sell the products.

“So, that value chain should be protected and kept. That is what we see that is being threatened by this decision by one company to refine, to store, and to distribute.

“Also, the irregular price changes have been affecting our buying power. It is not a PETROAN thing but a concern for the whole country,” Gillis-Harry said.

According to the PETROAN president, there are legal frameworks to support the action.

He cited that in 1975, a former head of state, Yakubu Gowon, set up Decree 9 to ensure that Petroleum products are equitably distributed across Nigeria.

He further cited that in 1989, another former head of state, Ibrahim Babangida, amended the decree.

“So, there are rules and I don’t think any one company should be able to interpret and operationalise what the regulator should do. This is what we need the regulator to interpret efficiently.

“And if a company as big as that our brother carries with its plans, that means it is going to take us out of business,” he expressed concern.

He vehemently opposed the Dangote Refinery’s distribution plan as it would take off transporters, retail outlets, marketers, and others out of business and affect all the jobs created by those operators.

He believes that the Dangote Refinery should expand, but such expansion should be a win-win situation and not to the detriment of other value chain players.

He faulted why such a critical decision was brought to a round table before stakeholders in the sub-sector.

“We want Dangote’s success, but we don’t want the success to tie everybody else’s efforts. There have been so many efforts made in the past 54 years in the sector, so we all must look at the reality, the effects of what some of our decisions, actions, or inactions will bring. That way, we can serve Nigeria better.

If this kind of decision is made, we are afraid that we could be thrown out of business. That is our concern,” he stressed.

Noting that the Petroleum Industry Act (PIA) guides operations in the industry, he cited that licensing has its procedure and that pricing is regulated by the whole of Article 207.

“So, if you have a licence to refine, then refine. And let those who have licences for operational facilities for storage do so, and let those who have permits for logistics do so, and let those of us who have approvals for retail outlets do our little bit and efficiently,” Gillis-Harry said.

If the plan takes effect, Gillis-Harry said the losses could run into trillions of naira for the various operators in the value chain, calling on the regulator to engage in productive discussion.

“We hope the industry leaders will be able to get everybody together on the same table to address issues so that everybody would be at peace and we can know exactly what to do,” he added.