THE Nigerian Petroleum Suppliers Owners Association of Nigeria (NOGASA) has allayed fears over Dangote’s dominance in the petroleum downstream sector, while seeking presidential intervention on the imminent job losses for its members.
The association’s president, Benneth Korie, made this known at the Annual General Meeting (AGM) of the organisation held on Thursday, July 31.
Korie said Dangote’s presence in all the petroleum downstream sector value chain, comprising refining, blending, storage, logistics, and price fixing, was exposing Nigeria to high monopoly risk and job loss for NOGASA members.
The ICIR reports that Dangote Petroleum Refinery has been playing a dominant role in Nigeria’s petroleum downstream sector, specifically in petrol blending, price fixing, and with proposed logistics control scheduled to kick off in August.
On Sunday, June 15, the 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 was to serve marketers, petrol dealers, manufacturers, telecoms firms, aviation, and other large users across the country.
It was scheduled 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.
The company has also been playing a major role in price reduction, which the marketers fear could expose Nigerians to a higher risk of possible scarcity if it fails to meet such a role.
“We want the president to advise Dangote. We suggest that Dangote and the petroleum union suppliers meet at a round table to ensure we avert possible loss of jobs and problems. He is deep in the petroleum supply chain, and our members are already affected since we have more than 50,000 filling station retail outlets.
“We have various petroleum retail outlets across the country, and if he chooses to play in the value chain, many of us could be out of business. At this stage, we want the president to intervene,” Korie said.
Dangote has also embarked on petroleum blending, distribution through its CNG trucks, and has selected filling stations with which it partners, thereby dominating the downstream value chain.
Before his entrance into the Nigerian petroleum downstream sector, Nigeria had been witnessing long queues, especially during the festive season.
Meanwhile, NOGASA officials pointed out that entrusting Dangote with 95 per cent of Nigeria’s energy needs could expose Nigeria to energy insecurity.
“One person will be playing the role of a refiner, petroleum blender, and a price fixer. We had a similar situation in our cement sector, and the price has been out of reach for a long time,” the President of Petroleum Retailers Association of Nigeria, PETROAN, Billy Gillis-Harry, told The ICIR on the sidelines of the event.
He stressed that Nigeria could run the risk of energy insecurity if Dangote controlled a chunk of the petroleum downstream sector and the supply logistics.
“Dangote is leveraging his dominant position to fix prices and beat competition, and it’s not in the best interest of our business. This is already leading to market shutdown of retail outlets,” he added.
He suggested to the petroleum regulatory authorities to ensure everyone plays by the rules of the game, adding that “regulatory oversight needs to be intensified for clarity.”
Earlier in his remarks, the Director-General of the Nigeria Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, represented by Ngozi Nwankwo, said, “The regulatory authority would support investors with enabling laws to succeed in the oil and gas business.”
He urged operators in the downstream sector to always seek regulatory support to enhance a level playing field for businesses.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.