The Depot and Petroleum Products Marketers Association of Nigeria, DAPPMAN, has written to President Bola Tinubu over alleged monopolistic tendencies of Dangote Refinery.
DAPPMAN said before Dangote Refinery was established, Nigerian business entrepreneurs already had investments in the country’s downstream petroleum sector running into trillions of naira, with taxes remitted to the various state governments by their respective employees.
This was contained in a letter addressed to the President and obtained by DAILY POST.
DAPPMAN noted several investments made by Dangote in the past and how he had allegedly monopolised certain sectors.
DAPPMAN stressed that possible monopoly by Dangote Refinery would jeopardize all its members’ investments.
It urged the President to intervene and ensure the sustenance of deregulation and free market policies intended by the Petroleum Industry Act (PIA) 2021.
The letter signed by the Executive Secretary of DAPPMAN, Olufemi Adewole, reads partly: “We understand that this is due to the implementation of the restrictions placed on ECOWAS member nations by ‘Afri 5’ gasoil and gasoline specifications which have the resultant effect that AGO purchases can only be made from one source being the Dangote Refinery.
“It is on credible record that marketers’ AGO imports have complied with the Afri 5′ gasoil and gasoline specification of sulphur content not exceeding 50/parts per million from January 2024 despite the inability of local refining capacity, including the Dangote refinery, to meet this specification to date.
“Dangote Refinery’s AGO presently has sulphur content exceeding 700/ppm in accordance with waiver granted by the NMDPRA. This far exceeds the average of 50/ppm sulphur required for AGO imports by marketers, yet the regulator has restricted all other downstream operators from sourcing this product exclusively from the Dangote Refinery.
“This is a clear adoption of Dangote Oil Refinery as the sole supplier of AGO to the nation. This situation is detrimental not only to the downstream operators but the nation at large. It deprives Nigerians of cheaper options as the Dangote Refinery always has the final say and dictate prices without any competing alternatives.”
The group emphasized the need for market forces to be allowed free reign in the sector within appropriate rule of law.
It added: “Dangote refinery’s initial step was to crash the price of AGO from a ‘high’ price of N1,700 per litres to N1,200/litre and later to N1,000 and later to N900/litre despite the large inventory of the imported AGO with marketers which thus could not be sold as it was imported with very high forex rate.
“Marketers with this huge volume of AGO saw the opportunity to reduce their losses when forex rates crashed and the naira appreciated against the dollar as they sought to import cheaper AGO stock to ‘blend’ their retail pump price, reduce their losses and sell off their AGO stock.
DAPPMAN lamented that regulators limited the source of AGO product to Dangote refinery through its restrictive policy.
“We wish to specifically refer to the stakeholders’ meeting between our DAPPMAN members and top management of Dangote Oil Refinery. Regrettably, despite assurances at the meeting, Dangote Refinery continues to offer refined petroleum products to foreign traders at $50 per metric tonne, cheaper than the pricing to local companies.”
The body assured the President of its availability to discuss and clarify all the salient issues raised, with a view to providing healthy fuelling alternatives, at competitive rates.
The letter reads further: “Dangote refinery’s initial step was to crash the price of AGO from a high of N1,700/ltr and later to N1000/ltr and later to N900/ltr despite the large inventory of the imported AGO with marketers which thus could not be said as it was imported with very high forex rate.”
This is coming amid claims by Aliko Dangote that some agencies where trying to frustrate the functionality of the refinery.
Dangote made the claim following allegations by the Chief Executive Officer of the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Farouk Ahmed, that his refinery was producing inferior fuel.
To resolve the imbroglio, Tinubu had ordered the sale of crude oil to Dangote’s refinery in local currency.
Tinubu’s Special Adviser on Revenue and Chairman of the Federal Inland Revenue Service, Zacch Adedeji, said the President’s order would save the country $7.3 billion annually.
