The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) and the Petroleum Product Retail Outlets Association of Nigeria (PETROAN) has warned the Federal Government that the move by Dangote Refinery to begin supply of petroleum products directly to consumers and its effect on current distributors will have negative consequences for the sector.
Reacting to recent announcement by Dangote Refinery to begin direct supply of petroleum products to end users from 15 August, NOGASA’s President, Benneth Korie said on Thursday at the association’s Annual General Meeting on Thursday that Dangote Refinery should concentrate on refining and selling products to the marketers, who sell to the end users.
This, according to him, is because the move by the refinery to bypass the traditional distribution could disrupt the oil and gas industry, putting thousands of jobs at risk and jeopardising the existing business models of suppliers nationwide.
Korie, however, said that the recent plan by the refinery to begin direct distribution of products, with the purchase of 4,000 distribution trucks for nationwide supply, had left the marketers worried in the business.
‘So today again, we are pleading for President Bola Tinubu to intervene in this matter by telling Dangote to slow down, and go by the rules of the game. Nobody is against the refinery.
‘The Dangote Refinery is doing well by refining products, we urge Dangote to concentrate on the refinery and remove hand from this direct distribution, we are capable to distribute products
‘All you need to do is to blend enough products and sell to depot owners and other countries and then we buy and distribute to the end users nationwide to sustain the system and avoid scarcity’.
Korie said the association was eager to maintain stability in the industry and would not want reoccurrence of the experience the marketers had with NNPC Limited (NNPCL).
He explained that the NNPCL was refining petroleum products and distributing through its subsidiary, the Pipelines and Products Marketing Company smoothly, but was disrupted immediately it began direct supply to its outlets only.
According to him, as soon as NNPCL began concentrating on its retail outlets, the refineries started going down because they are doing a whole lot including blending, crude sale, and at the same adding filling station to its operations.
He advised the management of the Dangote refinery to engage the relevant stakeholders in petroleum distribution and marketing constructively and discuss with them towards addressing the issues.
Chairman of the House of Representatives’ Committee on Petroleum Resources, Downstream, Hon. Ugochinyere Ikenga said that its goal was to create a situation where everyone would succeed, following the rules set in the Petroleum Industry Act.
Ikenga, represented by his colleague, Hon. Saba Ahmed, said that, it recognised, the inefficiencies in distribution networks, adulteration problem, annoying supply bottlenecks that could lead to shortages, and tough logistical issues of moving products nationwide.
‘These aren’t just things we talk about; they are real problems that affect people’s lives and our nation’s economy.
‘I want to assure you that the National Assembly is aware of these issues. We are particularly paying attention to Dangote’s recent move into distributing and selling products and how it might affect current distributors.
‘This is a big change, and I want to assure you that we are carefully looking into this situation’, he said.
Also, the National President, Petroleum Product Retail Outlets Association of Nigeria (PETROAN), Dr. Billy Gillis-Harry, raised alarm that job loss and business shutdown loomed in view of Dangote’s forward integration strategy of direct product supply.
‘With a production capacity of 650,000 barrels per day, which has now been up to 700,000 barrels, PETROAN simply argues that Dangote refinery should be competing with global refineries, not operating as a distributor in the downstream.
‘We, the marketers are more than able to do it, he said’, he said.
The Chief of Defence Staff, General Christopher Musa urged the association to remain resolute as it discharged its duties of petroleum distribution and marketing smoothly in the country.
Musa, represented by the Director of Logistics, Defence Headquarters, Rear Admiral Jonathan Mamman, urged the marketers to facilitate expansion of Compressed Natural Gas infrastructure and penetration of Liquefied Natural Gas in the country especially in remote places.
On safety and distribution of products along the coastal areas, he said the armed forces had been doing so much through the Nigerian Navy, which had numerous patrols and coverage of the coastal areas.
‘It’s gladdening to say that the International Maritime Bureau in Malaysia and the United Kingdom have delisted Nigeria from one of the countries, red-flagged countries, of piracy and attack on her maritime sectors.
‘We have not been having so much security issues, we are open to collaborations, suggestions, and support to the lead agencies protecting the oil and gas infrastructures inland’, he said. |
