Nigeria Doesn’t Need Fuel Importers Anymore, Refiners Warn

Owners of refineries in Nigeria have said that the country cannot continue to keep the businesses of fuel importers anymore, stating that Nigeria should be talking about fuel export at the moment.

Speaking under the auspices of the Crude Oil Refiners Association of Nigeria, they stated this amid complaints by depot owners that the Dangote Petroleum Refinery was planning to monopolise fuel supply in the country.

Earlier, the Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Farouk Ahmed, had accused the Dangote refinery of asking him to stop granting licences for diesel importation so that all traders would resort to buying from him instead of importing.

While appearing before the Senate Ad-hoc Committee to Investigate the Alleged Economic Sabotage in the Nigerian Petroleum Industry, the National Chairman of Depots and Petroleum Marketers Association of Nigeria, Abdulkabir Aliyu, made a subtle attack against the Dangote Group, which he said declared N133bn profit on sugar sales in Nigeria within the last six months.

He said such a feat was made possible for Dangote by allowing him to monopolise the sugar business in Nigeria.

The petroleum sector, he added, should not be allowed to be monopolised by any person or company, saying, “monopoly kills business.”

Speaking in an interview with media source on Thursday, the Publicity Secretary of CORAN, Eche Idoko, said Nigeria should no longer be talking about how to protect the businesses of depot owners.

“For the products that we have in-country capacity, the Federal Government should stop issuing import licences on them, like diesel and petrol,” said Idoko.

While agreeing that depot owners are also investors, Idoko questioned the value they create in the value chain aside from mounting pressure on the currency.

“I agree they are investors too, but it is an opportunity cost here. What value do depot owners create? Depot owners will ask you for a foreign exchange. Because of their cost of operation, and because of the middlemanship, depot owners will push the price up by about N150.

“Right now, I can tell you that independent marketers are buying petrol from depot owners at almost N800. If you remove these depot owners, it can’t be like that. An oil depot cannot be a viable plan for any country that wants to survive. A depot should be a placeholder pending when the refining capacity will increase,” he stated.

Idoko maintained that depot owners have refused to partner with refineries despite having the capacity

“Depot owners can build refineries, but they have refused. They can partner but they refuse. What is viable is, they can partner with any of the refineries to do bulk storage for them,” the CORAN spokesman insisted.

When told that the fuel importers were there for the country for many years with no refinery, Idoko disagreed, “They were not there for the nation, that is what they tell us. They were not there for us, and I stand by what I said. They’re not there, they’re doing business. They are the reason why we are where we are today. The point here is, how long will you be doing depot business, why won’t you grow?

“If we will have to continue to accommodate the depot owners, it means we will continue to import, and the naira will be under perpetual pressure.”

He spoke further, “The depot owners should evolve. We should see them entering into strategic partnerships with refineries so that those depots will graduate from an import hub to an export hub. For instance, if the Dangote refinery wants to export, it can do throughput with the tank farms that are at the waterfronts and people who want to buy Dangote fuel will buy from them and they get throughput money.

“They can decide to diversify; a lot of refineries here are looking for investors. Why can’t the depot owners partner with them and buy liquidities in these refineries and be relevant?”

Idoko emphasised that Nigeria cannot continue to keep depot owners’ businesses.

“How many people does an average depot employ compared to over a thousand people that an average refinery will employ? If you look at the economic values of the two options, I don’t think we should be having conversations on how to protect the businesses of the depot owners at the time.”

We should be talking about how we can rescue the country,” he maintained.

He challenged the depot owners to a debate, saying, “We are calling them to come and debate this openly with us. Let’s put the figures before Nigeria and we will see.”

Recently, former President Olusegun Obasanjo said that those benefiting from the lucrative business of fuel importation would make efforts to frustrate the Dangote Petroleum Refinery.

“Aliko’s investment in a refinery, if it goes well, should encourage both Nigerians and non-Nigerians to invest in Nigeria.

“If those who are selling or supplying refined products for Nigeria feel that they will lose the lucrative opportunity, they will also make every effort to get him frustrated,” Obasanjo stated in an interview with the Financial Times.

President Bola Tinubu said on Sunday that Nigeria now spends N2tn monthly to import fuel.

However, some experts have argued that Nigeria is not yet ripe to stop fuel importation until it has about four functioning refineries.