Otedola pitches Dangote Refinery as Nigeria’s future, says fuel depots fighting to preserve obsolete model built on fuel imports
By Jeph Ajobaju, Chief Copy Editor
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“I founded DAPPMAN in 2002 (23 years ago) with a clear mission, to challenge the dominance of the major marketers and give independent depot owners a fair platform to thrive,” Otedola said.
“I personally structured the group, appointing the late George Enenmoh, then Managing Director of Ascon Oil, as Chairman, while I served as Vice Chairman and Sayyu Dantata as Secretary. At the time, depot ownership was strategic. We were filling critical supply gaps left by an inefficient system.
“But times have changed. Many of the original players have exited the scene, and those left are clinging to assets that no longer reflect today’s business realities. I advised some of them as far back as last year to sell their depots as scrap while they still had value.
“Nigeria now has over 4 million metric tons of storage capacity, most of it idle. With the Dangote Refinery now supplying fuel locally, the old business model is crumbling ….
“I know this business intimately. I was king of it and at the peak of it in 2005 (20 years ago), I was conferred with the life patron of the PTD (Petroleum Tanker Drivers) union by Mr Akinlaja. So, when I say the game has changed, I speak from deep experience.
“What is DAPPMAN fighting for today? To preserve a model built on fuel imports, subsidy exploitation, and outdated infrastructure? That era is fast disappearing.
“The setting up of depots was mainly to collect PFIs. No depots, no PFIs (Pro Forma Invoices) from NNPC who were sole suppliers of gasoline (petrol) at the time and which thus led to the breeding of complacent importers whose sole agenda was on arbitrage and subsidy margins ….
“Depots do not drive employment as some claim. A typical depot employs perhaps five people, gatekeeper included. In contrast, a single filling station can provide jobs to dozens of Nigerians – from pump attendants to cashiers, security personnel, and cleaners.
“If anything, DAPPMAN members should be focusing on owning and scaling last-mile retail outlets, not holding on to tanks built for a fuel import economy that no longer serves us ….
“On subsidy, I personally warned President Goodluck Jonathan that he was being misled. The system was built to benefit depot owners, and DAPPMAN (Depot and Petroleum Products Marketers Association of Nigeria) members became the primary beneficiaries.
“Over N2 trillion was siphoned through questionable claims, all tied to depot licences. The policy rewarded neither transparency nor innovation, it encouraged rent-seeking and corruption” – Otedola.
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Femi Otedola, a fellow oil billionaire, has waded into the dispute between Dangote Refinery and the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) over supply model, advising the association to innovate or close shop.
Otedola disclosed that he has followed the argument over fuel supply between both parties and is compelled to provide perspective relating to the economic survival of Nigeria.
Otedola, in a statement he issued at the weekend on recent issues in the oil and gas sector, especially in the downstream, also congratulated Aliko Dangote on the success achieved so far since his refinery commenced operations, describing it as a historic leap for the country’s energy independence and economic future.
He insisted that Nigeria remains threatened by entrenched cabals who still believe they can resist change, but stressed that history shows that change can only be delayed but never halted.
Otedola recounted that he founded DAPPMAN 23 years ago to challenge the dominance of major marketers and give independent depot owners a platform to thrive.
At the time, he narrated, the association aimed to fill critical supply gaps left by an inefficient downstream system, but things have since changed, with many of the original players no longer on the scene, and those left clinging to assets that do not reflect today’s business realities.
“History has shown time and again: you can delay change, frustrate it, even sabotage it but you can never stop it.
“I founded DAPPMAN in 2002 (23 years ago) with a clear mission, to challenge the dominance of the major marketers and give independent depot owners a fair platform to thrive,” Otedola said.
“I personally structured the group, appointing the late George Enenmoh, then Managing Director of Ascon Oil, as Chairman, while I served as Vice Chairman and Sayyu Dantata as Secretary. At the time, depot ownership was strategic. We were filling critical supply gaps left by an inefficient system.
“But times have changed. Many of the original players have exited the scene, and those left are clinging to assets that no longer reflect today’s business realities. I advised some of them as far back as last year to sell their depots as scrap while they still had value.
“Nigeria now has over 4 million metric tons of storage capacity, most of it idle. With the Dangote Refinery now supplying fuel locally, the old business model is crumbling.
“Zenon Oil pioneered the modern diesel business in Nigeria and grew to become the largest supplier in the country. We built depots to store our imported diesel because the market was import-driven and riddled with inefficiencies.
“But with Dangote’s refinery fully operational, those gaps no longer exist. We now have domestic production and local supply efficient, reliable, and proudly Nigerian.
“Furthermore, we must not fail to recognise the attendant benefits of eliminating the gridlock around the Ibafon, Tincan and Apapa areas due to the operations of the Dangote Refinery.
“I know this business intimately. I was king of it and at the peak of it in 2005 (20 years ago), I was conferred with the life patron of the PTD (Petroleum Tanker Drivers) union by Mr Akinlaja. So, when I say the game has changed, I speak from deep experience.
“What is DAPPMAN fighting for today? To preserve a model built on fuel imports, subsidy exploitation, and outdated infrastructure? That era is fast disappearing.
“The setting up of depots was mainly to collect PFIs. No depots, no PFIs (Pro Forma Invoices) from NNPC who were sole suppliers of gasoline (petrol) at the time and which thus led to the breeding of complacent importers whose sole agenda was on arbitrage and subsidy margins.”
Otedola argued that, since there are no more PFIs, there is no reason why Dangote Refinery should subsidise DAPPMAN with N1.5 trillion which they are asking the refinery to pay and then pass this cost to consumers.
He saluted the courage of “my brother Aliko Dangote, like Amazon Incorporated” in bringing about transformative change in the oil downstream sector, and stressed that the myth that depots generate massive employment is not true.
“Depots do not drive employment as some claim. A typical depot employs perhaps five people, gatekeeper included. In contrast, a single filling station can provide jobs to dozens of Nigerians – from pump attendants to cashiers, security personnel, and cleaners.
“If anything, DAPPMAN members should be focusing on owning and scaling last-mile retail outlets, not holding on to tanks built for a fuel import economy that no longer serves us.”
Otedola urged his former association members to also take a cue from the global picture, saying depots in Amsterdam or Houston were designed to serve export markets, especially Africa, but that with Nigeria now refining locally, such infrastructure is increasingly unnecessary.
“The same thing happened in the cement industry. Once Nigeria started producing cement locally, the bulk carriers that used to dock at our ports were retired, many sold as scrap. The same outcome awaits fuel depots.”
If DAPPMAN members do not adapt, Otedola warned, they will not only become irrelevant but they may go bankrupt.
Instead of resisting progress, he urged them to consider selling, restructuring, or investing in new value chains, explaining that if they truly believe in competition, they could even come together and acquire the Port Harcourt Refinery and see if they can succeed where the NNPC could not.
Otedola said even in developed markets, refinery operators are downsizing their depot footprint, with many converting them into bonded warehouses or exiting completely; and also cited the Folawiyo Group, known for its foresight and integrity, which sold its depot and exited early. “That is strategic thinking.”
“DAPPMAN had its place but today, its relevance is fast fading. We must stop clinging to outdated privileges and focus on a new era built on self-sufficiency, transparency, and sustainable value creation.
“Aliko’s refinery is not the problem. It is the solution. Let’s move forward.”
He gave credit to President Bola Tinubu for the full deregulation of the downstream petroleum sector which no other leader before him had the political will to do.
This singular act has broken the grip of entrenched interests and ushered in a new era of transparency, healthy competition, and customer-centric service delivery, Otedola stressed.
“In a sector long plagued by rent-seeking, subsidy fraud, product diversion, and smuggling, this reform marks a decisive break from the past and lays the foundation for a more efficient and accountable energy market.
“Yet, despite this progress, there are still voices clinging to the old ways. Voices determined to resist change, even when it’s clear the tide has turned.
“On subsidy, I personally warned President Goodluck Jonathan that he was being misled. The system was built to benefit depot owners, and DAPPMAN (Depot and Petroleum Products Marketers Association of Nigeria) members became the primary beneficiaries.
“Over N2 trillion was siphoned through questionable claims, all tied to depot licences. The policy rewarded neither transparency nor innovation, it encouraged rent-seeking and corruption.
“Africans are proud of you [Dangote]. And yes, my dear brother Aliko, you can now go to Monaco and rest jejely like me. You’ve earned it.”
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