Dangote Refinery: Otedola Urges DAPPMAN To Cooperate Or Get Out

Busines s mogul Femi Otedola, has described the Dangote Refinery as a necessary change in the nation’s oil sector,  urging major stakeholders such as NUPENG and the DAPPMAN to embrace the situation or be consumed by it.

Otedola, a close associate of Africa’s Richest Man and President of Dangote Industries, Aliko Dangote mad the remark in a statement he shared recently.

He spoke following a recent clash between Dangote, NUPENG and DAPPMAN over the acquisition of 4000 CNG-powered  Trucks to distribute fuel produced from the refinery to marketers across the country.

Both NUPNEG and DAPPMAN have kicked against the step taken by Dangote, for allegedly trying to stop unionization in the industry and for trying to ease them out of business.

Reacting, Otedola who once hinted  of an imminent change in the sector as a result of Dangote entry into the sector, warned  tank farm and truck owners to be prepared to lose their investment, stressing that they cannot stop the imminent change in the sector no matter how hard they tried.

“But history has shown time and again: you can delay change, frustrate it, even sabotage it but you can never stop it. I founded DAPPMAN in 2002 (23 years ago) with a clear mission, to challenge the dominance of the major marketers and give independent depot owners a fair platform to thrive,” he said.
“I personally structured the group, appointing the late George Enenmoh, then Managing Director of Ascon Oil, as Chairman, while I served as Vice Chairman and Sayyu Dantata as Secretary. At the time, depot ownership was strategic. We were filling critical supply gaps left by an inefficient system.
“But times have changed. Many of the original players have exited the scene, and those left are clinging to assets that no longer reflect today’s business realities . I advised some of them as far back as last year to sell their depots as scrap while they still had value. Nigeria now has over 4 million metric tons of storage capacity, most of it idle. With the Dangote Refinery now supplying fuel locally, the old business model is crumbling.
“Zenon Oil pioneered the modern diesel business in Nigeria and grew to become the largest supplier in the country. We built depots to store our imported diesel because the market was import-driven and riddled with inefficiencies. But with Dangote’s refinery fully operational, those gaps no longer exist.
“We now have domestic production and local supply efficient, reliable, and proudly Nigerian. Furthermore, we must not fail to recognise the attendant benefits of eliminating the grid lock around the Ibafon, Tincan and Apapa areas due to the operations of the Dangote Refinery,” Otedola argued.
Today, more than just producing fuel, Otedola noted that Aliko Dangote has elevated the entire logistics chain, purchasing 8,000 brand new CNG eco-friendly trucks that will distribute across the country with less pollution and fewer breakdowns, unlike the aging, rickety trucks still used by some operators.
He added: “I know this business intimately. I was king of it and at the peak of it in 2005 (20 years ago), I was conferred with the life patron of the PTD (Petroleum Tanker Drivers) union by Mr Akinlaja. So, when I say the game has changed, I speak from deep experience.
“What is DAPPMAN fighting for today? To preserve a model built on fuel imports, subsidy exploitation, and outdated infrastructure? That era is fast disappearing. The setting up of depots was mainly to collect PFIs. No depots, no PFIs (Pro Forma Invoices) from NNPC who were sole suppliers of gasoline (petrol) at the time and which thus led to the breeding of complacent importers whose sole agenda was on arbitrage and subsidy margins.”
Since there are no more PFIs, the businessman argued that there is no reason why the Dangote Refinery should subsidise DAPPMAN with N1.5 trillion which they are asking Dangote Refinery to pay and subsequently pass this cost to consumers.
While saluting the courage of ‘my brother Aliko Dangote, like Amazon Incorporated’ in bringing about transformative change in the downstream sector, Otedola emphasised that the myth that depots generate massive employment was untrue.
“Depots do not drive employment as some claim. A typical depot employs perhaps five people, gatekeeper included. In contrast, a single filling station can provide jobs to dozens of Nigerians—from pump attendants to cashiers, security personnel, and cleaners.
“If anything, DAPPMAN members should be focusing on owning and scaling last-mile retail outlets, not holding on to tanks built for a fuel import economy that no longer serves us”, he stated.
Taking a cue from the global picture, the philanthropist pointed out that depots in Amsterdam or Houston were designed to serve export markets, especially Africa, but that with Nigeria now refining locally, such infrastructure is increasingly unnecessary.
“The same thing happened in the cement industry. Once Nigeria started producing cement locally, the bulk carriers that used to dock at our ports were retired, many sold as scrap. The same outcome awaits fuel depots,” he said.