…list impediments
The claim by Dangote Refinery Management that only about three per cent of local oil marketers patronise the refinery since it commenced production of diesel and aviation fuel early this year has been faulted by marketers.
Devakumar Edwin, Vice President, Dangote Industries Limited, asserted yesterday that only about three per cent of local oil marketers are purchasing refined products from the 650,000 barrels per day refinery.
“The conglomerate of all oil marketers is refusing to buy from us. It is very strange that after putting up the refinery to supply the products locally, we have to export every diesel and jet fuel because they do not want to buy from us,” he said.
Faulting Devakumar, local oil marketers said despite some impediments allegedly created by the refinery management, “we have continued to patronise the refinery between April and September this year. “
Quoting from records at their disposal, which they claimed to have sourced from the database of Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) and Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), they said local oil marketers, at various times between April 9 and September 9 2024, loaded about 30 vessels laden with over 17,000 metric tonnes of products.
The local companies that patronised Dangote Refinery during the period in question include Nigerian National Petroleum Company Limited (NNPCL), Sahara Energy, MRS Oil & Gas, Rainoil, NIPCO, A.A. Rano, UGL (NIPCO), AYM Shafa, TMDK and Prudent Petroleum in addition to 33 others local oil marketers.
They said available data showed that these local companies berthed their vessels, loaded products and departed the refinery to their various depots at various times between April and September this year.
Olufemi Adewole, Executive Secretary of DAPPMAN, in an earlier media interface, had asserted that local oil marketers are excited about the entrance of Dangote Refinery into the Nigerian downstream sector and that there is no reason for members of his association not to patronise the refinery as long as there is a level playing field and room for healthy competition.
He confirmed that members of his Association have continued to patronise the Refinery since it commenced production.
Although local oil marketers are inclined to patronise Dangote Refinery, they said that some trade policies of the Management of the Refinery may have constituted a serious hindrance to patronage by local oil marketers.
They alleged that some of the policies of the Dangote Refinery management have constituted serious impediments for local marketers. One policy of the refinery they claimed not to be happy with is the alleged restriction of loading to a minimum of 20,000 metric tonnes per buyer of diesel. They said it is difficult, if not impossible, for local oil marketers that want to buy less than the minimum quantity.”
They said further: “Dangote Refinery restricted loading to 20,000 metric tonnes minimum and many marketers, who required lower volumes of 5000, 10,000 and 15,000 metric tonnes, of any product: AGO or ATK, were denied by Dangote Refinery; such marketers are seen as not being worthy of their attention.
” Marketers wanted to co-load their volumes but disparity in the time the product is required differ and Dangote Refinery refused to reconsider requests for these lower quantities. How do you then turn around to blame the same marketers for not patronising the Refinery?”
They also said that local marketers have been confronted with payment options challenges. They disclosed that payment for cargo offtake from the Refinery should not be in US dollars, but in Naira.
“Local oil traders with Dangote Refinery should have the option of payment in Naira as this will reduce the attraction of trading with international suppliers and will reduce the pressure on the Naira. But as at now, this is not the situation.”
On the claim that because of low patronage by local marketers, the Refinery is being forced to export its products, the marketers pleaded for a review of the current policies.
” We are disadvantaged by the Dangote Refinery policy of selling Big Parcels of products to international traders who then take such products offshore Lome and resell to Nigerian oil traders in small parcels and in market terms that they are used to, such as credit terms, in Naira (eliminating exchange risks) and in quantities needed, and of course higher than what they paid Dangote Refinery. ” they said.
“Despite all these challenges arising from the Dangote Refinery Management trade regulations, local oil companies have shown genuine intention and have actually gone ahead to patronise the Refinery far beyond the three per cent mentioned by the Group’s Vice President.
“It is only the Refinery’s management that can widen the scope of the patronage by relaxing all the policies that are not in the interest of the local traders,” they said.(The Nation)
