The Natural Oil and Gas Suppliers Association of Nigeria has warned that the Dangote Petroleum Refinery’s plan to bypass existing distribution channels and supply refined petroleum products directly to end-users would lead to a nationwide disruption, long-term product scarcity, and the collapse of existing supply networks.
The oil and gas suppliers called on the refinery to halt its plan and seek further dialogue before commencing the distribution of products to end users, urging it to learn from what happened to non-functional refineries under the management of the Nigerian National Petroleum Company Limited.
They also called on President Bola Tinubu to intervene in the issue, stressing that Dangote alone cannot handle nationwide distribution of products sustainably. The NOGASA National President, Bennett Korie, made the call during the association’s Annual General Meeting held on Thursday in Abuja.
However, an official of the Dangote Group described the position of the dealers as anti-Nigeria, arguing that the plan by Dangote was to remove the cost of logistics in the movement of petrol nationwide.
Speaking with correspondents, while reacting to the development, the National President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Billy Gillis-Harry, said Nigerians should not rejoice yet over the announcement by the Dangote refinery, as he backed the sister oil marketing group, NOGASA.
Meanwhile, it was observed on Thursday that the prices of petrol at depots spiked by up to seven per cent, from the N815 per litre it sold on Wednesday to N870 per litre on Thursday.
Recall that the $20bn Dangote refinery recently disclosed plans to deploy 4,000 new Compressed Natural Gas-powered tankers for nationwide distribution of petrol and diesel directly to marketers, manufacturers, telecom firms, aviation companies, and other large consumers, bypassing traditional depots and intermediaries.
The refinery took delivery of 4,000 new CNG-powered trucks for its fuel distribution initiative, scheduled to be launched on August 15. The initiative, which is intended to provide more efficient transportation across Nigeria and beyond, has been applauded by some industry experts. With the investment of N720bn, the initiative is expected to save Nigerians over N1.7tn annually, and lift 42 million Micro, Small, and Medium Enterprises by reducing energy costs and enhancing profitability.
The refinery said the strategic programme is part of its broader commitment to eliminating logistics costs, enhancing energy efficiency, promoting sustainability, and supporting Nigeria’s economic development.
However, Korie, speaking in his address, said if existing retail outlets were forced out of business due to Dangote’s direct distribution approach, it would be difficult to revive the supply chain in the event of any disruption at the refinery.
He further warned that handling refining, distribution, and retail through filling stations as a single entity is unsustainable, citing the failed attempt by the Nigerian National Petroleum Company Limited at direct distribution. He stated that the state-owned refineries began to decline after the oil company ventured into retail distribution.
“We are pleading that Mr President should intervene in this matter by telling Dangote to slow down, and go by the rules of the game. Nobody’s against the refinery. If there’s anybody who supported Dangote Refinery more than any other organisation, it is this association.
“But when this issue came up, we said, no, we need to advise, we need to give you an idea how to go about it. What is important to us is that the refinery is blending, the product is coming out, and Nigerians are enjoying the product that is blended today.
“Now, some Nigerians will be thinking maybe because we don’t want him to do this or because of competition. No, it is because we don’t want what happened to NNPCL to happen to Dangote Refinery. The reason is that, before now, NNPC refined products and distributed them through their subsidiary at that time.
“And everything was moving smoothly, it wasn’t bad. Until people who I think advised Dangote today, went to advise NNPC to start doing distribution directly, which is the filling station that you have in NNPC filling stations. As soon as this NNPC filling station started, that was when our refinery started going down,” Korie said, warning that the same fate could befall Dangote’s $20bn refinery if it follows a similar path.
