Marketers desert private fuel depots as thousands of Dangote tankers reduce transportation and logistics costs for traders and consumers alike
By Jeph Ajobaju, Chief Copy Editor
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“The downstream petroleum sector is currently destabilised as the new market leader [Dangote] is calling the shots. The 1, 000 trucks roll out on Monday have heightened tensions among depot owners and retailers causing a sharp decline in purchases.
“For the first time, global oil prices are rising and depot prices are dropping, that is the power of local market forces engineered by Dangote Refinery.
“By and large, this revolution will drive the industry to embrace best practices and drive prices at the pump” – Olatide Jeremiah, Petroleumprice.ng CEO.
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Private fuel depots in Lagos and environs are being deserted with Dangote Refinery rolling out direct supply to filling stations to reduce transportation and logistics costs for operators which, in turn, slashes pump price to benefit consumers.
“The Dangote Petroleum Refinery has commenced direct supplies to marketers. This is mainly why the depots have recorded skeletal operations,” an anonymous industry source told Vanguard.
Olatide Jeremiah, Petroleumprice.ng Chief Executive Officer reiterated that “The downstream petroleum sector is currently destabilised as the new market leader [Dangote] is calling the shots. The 1, 000 trucks roll out on Monday have heightened tensions among depot owners and retailers causing a sharp decline in purchases.
“For the first time, global oil prices are rising and depot prices are dropping, that is the power of local market forces engineered by Dangote Refinery.
“By and large, this revolution will drive the industry to embrace best practices and drive prices at the pump.”
Dangote Group President Aliko Dangote stressed at a conference on Monday that the refinery has impacted Nigeria’s energy security, recounting how citizens endured persistent fuel queues for 50 years, dating back to 1975, which have now vanished.
“We have been battling fuel queues since 1975, but today Nigerians are witnessing a new era,” he said at the conference marking the first anniversary of petrol production at the 650,000 barrels-per-day refinery on 15 September 2014.
Dangote acknowledged the numerous challenges the refinery has faced since its inception but reaffirmed its unwavering commitment to Nigeria and Africa.
“The journey has been challenging because we sought to transform the downstream sector in Nigeria. Some believed we were taking food from their tables, which simply isn’t true. What we have done is to make our country and continent proud.
“Previously, only two African countries were not importing petrol, but regrettably, they have since resumed imports. This is detrimental to Africa.”
He disclosed that the project involved enormous risk and narrated how he received repeated warnings from industry experts, investors, local and foreign government officials, who argued that only sovereign nations undertake such large-scale refinery ventures.
“The decision to build the refinery was not easy. If it had gone wrong, lenders would have taken our assets. But we believed in Nigeria and Africa.”
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