The Depot and Petroleum Products Marketers Association of Nigeria has raised the alarm over what it describes as an emerging monopoly in the downstream petroleum sector.

The marketers warned that the dominance of the Dangote Refinery could destabilise the market if not carefully managed.

In an interview with TVC on Friday, the Executive Secretary of DAPPMAN, Olufemi Adewole, dismissed allegations of a ?cabal? in the sector but admitted the existence of vested interests among private depot owners who have invested billions of naira over the years to keep fuel flowing to Nigerians.

?There is no cabal in the midstream and downstream operations as far as I am concerned, because, going by the English definition of the word cabal, it?s a negative, subversive thing. There is no cabal. But I can tell you that we have vested interests.

?My principals have vested interests in the sector. So if they have invested over these years, billions of Naira, and they have bridged the gap, even before Dangote, they were there when nobody was there to bridge the gap and ensure Nigerians get fuel. Definitely, they should have commensurate returns on their investment.

?So, on that, I would say there is no cabal, but there are vested interests,? Adewole stated in the interview.

His reaction comes days after revelations by the President of the Dangote Group, Aliko Dangote, who declared that his $20bn refinery is still ?fighting for survival? amid what he described as sabotage by entrenched interests and oil sector cabals resisting local refining.

He stated that the battle with entrenched oil cabals, one that began even before the refinery commenced full operations, was still ongoing, but expressed confidence that he would ultimately prevail in securing the refinery?s future.

He pointed out that some individuals who ?for a very, very long time? have ?made a lot of money from? government-subsidised oil imports into Nigeria, were the ones trying to sabotage the 650,000 barrels per day oil refinery situated in Lekki, Lagos.

?We are fighting, and the fight is not yet finished. But I have been fighting all my life, and I am ready and 100 per cent sure I will win at the end of the day,? he was quoted at an investor forum in Lagos.

Speaking further, the DAPPMAN official stressed that the Dangote Refinery, despite its massive 650,000-barrel capacity, has not been able to meet even the current reduced local consumption needs.

He argued that private depot owners continue to bear the bulk of the fuel distribution burden across the country.

?Quoting the authority?s chief executive in his recent presentation at the Villa, he stated that Dangote Refinery is not meeting up to even the reduced local consumption volume.

?So, for now, Dangote Refinery cannot meet up. It is we, the private depot owners, that have been bridging the gap and meeting the needs of Nigerians.?

According to him, stopping the importation of fuel at this stage would be ?chaotic? and ?dangerous,? adding that a phased strategy is more viable once multiple domestic refineries come onstream.

Adewole also expressed deep concern over what he called a ?clear and present danger? of monopoly, noting that Dangote?s scale gives it excessive influence over pricing and supply channels.

He noted, ?You can?t stop importation today. That would create chaos and a monopoly. Yes, it can be stopped?but only when we have adequate local production from several sources, not just one.?

?The concerns of possible monopoly in the downstream of the petroleum sector are what we can term as a clear and present danger. We have been talking about it. We have been deliberating about it.

?Right now, we have a refinery, a 650,000 barrel capacity refinery. Its price, volume and capacity alone give the refinery the edge over all others. It can manipulate prices. It can dictate prices. It can get what it wants. So it?s a clear and present danger for us, and we would rather not have it that way.

?But the beautiful thing is that we have the regulators, who have been doing fantastically since they came on board. They are ensuring that no organisation deviates from the provisions of the Petroleum Industry Act, which ensures that it is a free market, and many players can come in and play in the system, and anything that goes towards monopoly is checkmate.?

He added, ?You will recall that Dangote recently took the Nigerian Midstream Downstream Petroleum Regulatory Authority and a few other marketers to court. This tells you their mindset, and what they were challenging is actually the authority of the regulator, which is enshrined in the PIA, to release import licenses for marketers to import fuel. So it gives you a picture into their mindset.

?So the fear of monopoly is real, and we are working with other stakeholders to make sure this is not realised, and we are working with the regulators, encouraging them to do their work so that this is curtailed.?

He further praised the Nigerian Midstream and Downstream Petroleum Regulatory Authority for maintaining market integrity under the Petroleum Industry Act but noted that Dangote Refinery?s recent legal action against the authority suggests a desire to bypass market checks.

?They went to court to challenge the authority?s power to issue import licenses to other marketers. That tells you their mindset.?

On direct dealings with the refinery, Adewole said DAPPMAN members are not getting a fair opportunity to purchase products, alleging that the refinery prefers to sell only to selected marketers via gantry supplies, rather than bulk depot loading.

?Dangote Refinery prefers a selective approach. We have depots in Calabar, Port Harcourt and other coastal cities ready to pick in bulk?10,000, 15,000, even 20,000 metric tons?but access to load vessels is restricted.?

He also disclosed that price slashes after cargoes have left the gantry have left many marketers absorbing losses quietly, just to stay afloat.

?We didn?t come out to make noise. But we?ve been bearing the brunt, just to remain sustainable and profitable.?

Addressing the issue of pump pricing, Adewole explained that the cost of petroleum products is built on multiple layers: from crude price to refinery margins, logistics, and retail costs, highlighting the impact of operational inefficiencies and high financing costs on final prices.

?Depot operations are tough. Equipment is ageing, and capital costs are high. To import 20,000 metric tons, a marketer needs an exposure of over N20 billion. Most of this is bank-funded at high interest rates, ?he added. (Saturday PUNCH)

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