Fears about Dangote Refinery monopolising petroleum products production and distribution because of the planned introduction of its own petroleum products distribution are unfounded and based more on fear and worry not on sound economics.
First, there are those who are still importing petrol, jet fuel, and diesel from blending plants outside Nigeria despite Dangote Refinery being able to meet local demand with quality products.
If importers of petroleum products obtained from blending plants are allowed to compete with Dangote Refinery, why can’t Dangote Refinery also be involved in petroleum products distribution?
Secondly, this business model of production and distribution of petroleum products by Dangote Refinery is what is already being done by Dangote Cement.
Across Nigerian roads, we see Dangote Cement trucks distributing cement to distributors across Nigeria, ensuring cement products proximity and availability to eventual buyers.
This will ensure petroleum product availability and price stability for petrol stations and customers across the length and breadth of Nigeria just like we have for Dangote cement.
Third, the existing petroleum products distribution network that was complicit in both the fuel subsidy and petroleum equalization fund heists, including products smuggling, could do with serious competition.
For decades, operators in the current petroleum products distribution network have held Nigerians by the jugular, almost choking the life out of the country due to their truancy and unpatriotic actions.
Fourth, Dangote Refinery cost $20bn to build, the majority of which was borrowed from international lenders. NNPC turned down on behalf of the FG and Nigerians the opportunity to be a 20% shareholder in Dangote Refinery.
Ensuring production of top grade petroleum products getting to end users through efficient distribution processes that ensure product availability and consumption at stable prices is in the interest of Dangote Refinery and Nigerians.
Fifth, it is not that operators IÂ the present petroleum products distribution will disappear, but they will eventually be forced to compete with the new Dangote Refinery products distribution system.
If the 22 or more NNPC Ltd petroleum products depots across the country were still in operation, then it would have been a question of piping these products straight to the depots for faster distribution across Nigeria
But alas, NNPC Ltd has killed these products depots much the same way it has killed its refineries, turning them into sunction pumps for sucking out public funds into private pockets. Now, the day of reckoning has come.
Eventually an investor will see the wisdom in either buying from NNPC Ltd and reviving these products depots and their connecting pipelines, or building new depots and pipelines and that will even be a more efficient way of distributing products.
Existing petroleum truck distribution owners will also be forced to upgrade the quality of their trucks and better trained drivers thus sparing Nigerian road users from the carnage and deaths that come from using poorly maintained trucks driven by untrained drivers.
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