Abuja: The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) has urged the Federal Government to intervene in Dangote Refinery’s move to supply petroleum products directly to consumers and its effect on current distributors. NOGASA said the move by the refinery to bypass the traditional distribution could disrupt the oil and gas industry, putting thousands of jobs at risk and jeopardizing the existing business models of suppliers nationwide.
According to News Agency of Nigeria, NOGASA’s President, Benneth Korie, addressed the issue on Thursday in Abuja at the association’s Annual General Meeting. He urged the Dangote Refinery to focus on refining and selling products to marketers, who in turn distribute to end-users. This call comes after Dangote Refinery recently announced plans to begin direct supply of petroleum products to end users from August 15, aiming to eliminate logistics costs and enhance energy efficiency.
Dangote Refinery stated that petrol stations purchasing PMS and diesel from the refinery would benefit from enhanced logistics support. It emphasized that sectors such as manufacturing and telecommunications would see reduced fuel costs, lower production costs, and reduced inflation as a result of this initiative. However, Korie expressed concerns that the refinery’s plan to begin direct distribution with the purchase of 4,000 distribution trucks had left marketers in the business worried.
Korie called on President Bola Tinubu to intervene, suggesting that Dangote should adhere to established distribution practices. He emphasized that marketers are capable of distributing products and that Dangote should focus on refining and selling to depot owners. Korie expressed the association’s eagerness to maintain stability in the industry and avoid past disruptions experienced with the Nigerian National Petroleum Company Limited (NNPC Ltd.).
In his remarks, Mr. Ugochinyere Ikenga, Chairman of the House Committee on Petroleum Resources, Downstream, highlighted the inefficiencies in distribution networks and logistical challenges. He assured that the National Assembly is aware of these issues and is closely monitoring the situation with Dangote’s distribution plans.
Dr. Billy Gillis-Harry, National President of the Petroleum Product Retail Outlets Association of Nigeria (PETROAN), expressed alarm over potential job losses and business shutdowns due to Dangote’s direct supply strategy. He argued that Dangote should compete with global refineries rather than operate as a distributor in the downstream.
Gen. Christopher Musa, Chief of Defence Staff, urged the association to remain resolute in its duties of distribution and marketing. He emphasized the importance of expanding Compressed Natural Gas infrastructure and Liquefied Natural Gas penetration, particularly in remote areas. Musa also highlighted the Nigerian Navy’s role in securing coastal areas, noting the positive impact on Nigeria’s maritime security reputation.