AThe Independent Petroleum Marketers Association of Nigeria (IPMAN) has voiced its objection to the recent announcement by Dangote Industries Limited, stating that the Nigerian National Petroleum Company Limited (NNPC Ltd) will be the exclusive buyer of fuel refined at its new facility.
Devakumar Edwin, Vice President of Oil & Gas at Dangote Industries, revealed that NNPC Ltd will be the sole importer of the refined gasoline from the 650,000 barrels per day capacity Dangote Refinery and Petrochemical Complex. Located in the Lekki Free Zone, Lagos, the refinery, which cost approximately $20 billion to build, has begun testing its refined products. However, Edwin did not specify when these products would be available in the market.
“We are currently testing the products, and soon, they will start flowing into the product tanks. NNPC Ltd, being the sole importer of fuel, will buy our gasoline exclusively. If there is no local demand, we will export it, just as we have been exporting our aviation jet fuel and diesel,” Edwin said.
The decision has sparked concerns within the oil and gas sector, particularly from IPMAN.
IPMAN’s National Public Relations Officer, Mr. Chinedu Ukadike, criticized Dangote’s move to restrict fuel sales to NNPC Ltd. Ukadike suggested that Dangote’s decision might be influenced by NNPC Ltd’s investment in the refinery, as companies often prioritize their investors to ensure quicker recovery of their investments.
“The monopoly we have been worried about will likely persist if NNPC Ltd remains the sole importer of petroleum products. With Dangote fuel entering the market and NNPC Ltd being the exclusive buyer, the competition we hoped for in a deregulated downstream sector might not materialize,” Ukadike stated.
Ukadike argued that allowing only NNPC Ltd to purchase refined fuel could stifle competition and maintain a monopolistic hold over the industry. He called on Dangote to open its fuel sales to independent marketers, offering them the same purchasing opportunities as NNPC Ltd.
“As independent marketers, we urge Dangote to consider us as potential buyers and provide us with equal opportunities to off-take their products, just like NNPC Ltd. We are uncomfortable with NNPC Ltd being the sole off-taker of Dangote fuel,” Ukadike added.
The controversy highlights ongoing concerns about market competition and monopoly in Nigeria’s petroleum industry, especially with the expected increase in domestic refining capacity brought by the Dangote Refinery. IPMAN’s call for inclusion reflects a desire for a more open market where multiple players can participate equally, ensuring competitive pricing and accessibility for all