Refinery owners in Nigeria are advocating for a shift away from relying on fuel importers, emphasising the importance of focusing on fuel Export to strengthen the country’s economy. During their speech, representatives of the Crude Oil Refiners Association of Nigeria addressed concerns raised by depot owners regarding the Dangote Petroleum Refinery’s alleged Monopoly intentions. Farouk Ahmed, the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, made allegations against the Dangote refinery. He claimed they requested him to cease issuing diesel import licences to monopolise the market and compel all traders to purchase from them instead of importing.
Abdulkabir Aliyu, the National Chairman of the Depots and Petroleum Marketers Association of Nigeria, testified at the Senate Ad-hoc Committee investigating alleged economic sabotage in the Nigerian Petroleum Industry and expressed concerns about the Dangote Group’s reported ₦133 billion profit from sugar sales during the past six months. According to him, allowing Dangote to dominate the nation’s sugar industry was the key factor in his impressive achievement. Also, During an interview, Eche Idoko, the Publicity Secretary of CORAN, expressed that the country should focus away from discussions on preventing depot owners’ interests from being harmed.
Experts suggest govt to stop issuing permits for diesel and petrol imports.
Idoko suggested that the Federal Government cease granting import permits for commodities such as diesel and petrol within the country’s limits. He acknowledged that depot owners are Investors and stakeholders but doubted their contribution to the value chain beyond negatively influencing the currency. He further acknowledged the investors’ status and pondered about the creation of the depot owner. Depot owners will request foreign exchange due to operational costs and acting as intermediaries, causing them to raise prices by around ₦150.
He emphasised that independent marketers pay nearly ₦800 per litre to depot owners, arguing that bypassing depot owners could lower costs. He added that depots should be temporary, pending an increase in the country’s refining capacity. Idoko argued that refinery owners have consistently avoided collaboration with depot owners despite being capable of doing so. Depot owners can construct refineries but have chosen not to do so. He added that they have consistently declined despite having the option to enter into partnerships.
Appeasing depot owners will weaken the naira and keep imports high.
The spokesman for CORAN emphasised that a feasible alternative would be for depot owners to collaborate with existing refineries for bulk storage services. Continuing to appease the depot owners will result in ongoing imports, leading to constant strain on the naira. He encouraged depot owners to adapt and grow, suggesting establishing key alliances with refineries to transition depots from import centres to export centres. One potential scenario could involve the Dangote Refinery utilising waterfront tank farms for exporting purposes, leading to income generation via throughput charges. Many refineries are seeking investors for diversification opportunities.
Depot owners could collaborate with these refineries, invest in their liquid assets, and stay competitive. Idoko made a strong point about the need to stop supporting depot owners’ businesses from now on. He argues that a refinery employs over a thousand people, far surpassing the few employed by depots, making economic discussions about protecting depot owners’ businesses less relevant. His point was that the focus should be on discussing strategies to save the nation. He proposed a public debate with the depot owners, inviting them to present their arguments openly. He suggested showcasing the numbers for everyone in the country to see and judge for themselves.
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Ex-President Olusegun Obasanjo has expressed concerns about potential opposition from those profiting from fuel imports towards the success of the Dangote Petroleum Refinery. Aliko’s successful Investment in a refinery has the potential to attract investments from both locals and foreigners, boosting the national economy. In a recent interview, Obasanjo mentioned that if suppliers of refined products to the country believe they are missing out on a profitable opportunity, they will greatly frustrate him. However, President Bola Tinubu stated that the country currently spends ₦2 trillion monthly on fuel imports. On the other hand, some experts believe that the nation should continue importing fuel until at least four refineries are fully operational.