Energy expert and Co-Founder of Dairy Hill, Kelvin Emmanuel, has defended Dangote Refinery’s logistics strategy amidst growing criticism over its use of trucks to distribute petroleum products across Nigeria.
Responding to calls for the use of sea, rail, or barges instead of trucks to avoid further damaging Nigeria’s already deteriorating roads, Emmanuel made it clear that policy limitations restrict Dangote’s options.
“Dangote is not a regulator. Dangote does not determine what happens with policy for the downstream sector in oil and gas. He’s only a player and he’s doing his job,” he said. “Railway is in the exclusive legislative list, it’s not in the concurrent list. Dangote doesn’t have control over railways. It’s the government’s responsibility.”
Speaking during an interview on ARISE NEWS on Tuesday, Emmanuel addressed concerns that the Dangote Refinery could create a monopoly in the oil and gas sector and hold the market hostage. He argued that the real issue lies not with Dangote, but with entrenched inefficiencies in the system.
“People have a reason to ask these questions,” Emmanuel said. “So I’ll tell you that the business marketers have been doing in Nigeria is not selling PMS for 5 to 15 Naira margins across the country. That’s not their real business. The business they’ve been doing is the arbitrage opportunity they get from bringing in products that doesn’t meet up with the sulphur level as stated in the PIA (Petroleum Industrial Act)…”
He noted the massive logistical discrepancies that have plagued the distribution system.
“For example, I can tell you for a fact that today NMDPRA, the mainstream and downstream regulator is owing Ipman 1.8 billion Naira bridging claims. Whether those bridging claims are true, it will depend on an external forensic audit,” he said. “Dangote has come to Nigeria to do what NNPC has failed to do for 25 years.”
Emmanuel also pointed out that much of the country remains underserved despite NNPC’s efforts. “The only places that enjoy the actual price of PMS in Nigeria are Lagos, a few surrounding states in the southwest, and Abuja,” he said.
“What Dangote is saying is that he’s going to assume transportation costs, he’s going to assume storage costs, he’s going to assume bridging costs, and deliver petrol to retail stations because you’ve had marketers frustrate the ability of Nigeria to enjoy the benefits of owning a refinery in Nigeria.”
On water-based transport options, he acknowledged that some barges are in operation, “but you see, the problem with barges is that even when the barges get to the ports, you have to discharge it into depots. The depots are not owned by Dangote.”
He explained that the company’s current reliance on trucks was a practical response to systemic bottlenecks.
“The immediate quick solution that he has identified to get the petrol and boycott all the bottlenecks and threats that he’s been getting from stakeholders to frustrate the ability of him to supply at a reasonable price across the board in Nigeria is to provide CNG trucks to the last mile,” he concluded.
Faridah Abdulkadiri
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