OIL marketers in Nigeria have called for healthier competition with Dangote Refinery.
They said the refinery’s newly launched CNG-powered trucks would not be enough for an effective distribution of petroleum products across Nigeria.
The marketers also noted that their depots across the country were recording losses since Dangote began to show market dominance in the petroleum distribution value chain.
The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, stated these while speaking on Channels Television’s The Morning Brief on Tuesday, September 23.
He said investments of oil marketers in the downstream sector should not be discarded.
“All we are asking for is inclusion because there is no way Dangote’s trucks will be enough to supply products to the nooks and crannies of the country. We are also investing in CNG trucks, so there is not so much innovation in saying Dangote is the only one with such trucks.
“All we want is to ensure seamless and effective supplies to even areas where Dangote’s trucks cannot reach. “We, the retail outlet owners, are the last men in the industry, and should be able to get products from almost all the depots in the country. We want Dangote Refinery to be successful”, he said.
His response was at the instance of billionaire and businessman, Femi Otedola, who asked members of the Depot and Petroleum Products Marketers Association of Nigeria and the Dangote Refinery (DAPPMAN) to sell their properties, restructure, and reinvest in government-owned refineries in the country to stay relevant in the sector.
Otedola argued that preserving a model built on fuel imports, subsidy exploitation, and the outdated infrastructure era was fast disappearing.
“The setting up of depots was mainly to collect PFIs. No depots, no PFIs from NNPC, which were the sole suppliers of gasoline at the time, and which thus led to the breeding of complacent importers whose sole agenda was on arbitrage and subsidy margins,” the business mogul said.
“The global picture is instructive. Depots in Amsterdam or Houston were designed to serve export markets, especially Africa. With Nigeria now refining locally, such infrastructure is increasingly unnecessary,” he stressed further.
He suggested to DAPPMAN to quickly adapt to the new era, citing the example of cement deregulation, which affected bulk carriers that used to dock at various ports across the country.
Responding, Gilly-Harris said Otedola’s advice to DAPPMAN to scrap their depots was insensitive to the plights of the businessmen.
“Otedola’s view on marketers innovating and restructuring is not a thoughtful statement. Is he saying all the investments that have happened in that sector should just go down the drain?
“Yes, new things come up in terms of innovation, and old things will go, but there are structures that will still serve even in this current reality. Dangote’s investment in the sector is very timely because it gives all of us peace of mind, he said, adding that, “Mr Otedola’s thoughts are up for debate because he himself was a DAPPMAN member, and he knows what it took for him to invest in that area.
“Today, he has diversified into other areas, but others have not been able to move.”
He noted that Otedola’s divestment to other areas was a fast business decision, while he expressed concern that his recommendation to scrap investment in the depot business was not a good advice.
The ICIR reports that marketers have facilities across Nigeria- Port Harcourt, Calabar, Ogara, Lagos, and even some of them on the mainland to help ease product distribution.
