An inexplicable lacuna exists between monopsony downstream petrol cartel buyers – Nigeria National Petroleum Company Limited (NNPCL), Major Energies Marketers Association of Nigeria (MEMAN) and Independent Petroleum Marketers Association of Nigeria (IPMAN) – and monopoly supplier, Dangote Refinery.
The feints and thrusts of players in the midstream and downstream sectors of the imperfect market of Nigeria’s petroleum sectors is all about taking the most profit without taking responsibility for expected hike in petrol pump price. IPMAN claims that imported petrol is cheaper than Dangote petrol.
Aliko Dangote, President of Dangote Refinery, obviously wondering if he may get stuck with his products, launched into a pleading jeremiad: “I am expecting that the NNPCL and the marketers should stop importing (petrol). They should come and collect what they need. I don’t know if you understand what it means to keep half of a billion litres (of petrol) in our tanks. It is costing me money.”
He took his plea to President Bola Tinubu, whom he probably told, “We can supply whatever is being consumed. What I estimated as (Nigeria’s) consumption is about 30-32 million litres, that we can even start to produce by next week.”
The APC Progressive Governors’ Forum thinks marketers and NNPCL have no further justification for importing petrol, not with Dangote Refinery’s capacity to supply Nigeria’s petrol needs.
But there is a plethora of accusations against Dangote Refinery. IPMAN Chairman, Abubakar Maigandi, alleges that “Until now, NNPCL is still the sole off-taker of Dangote petrol.” He explains that, “In buying from Dangote Refinery, there are some processes put in place by the company that we are following. They said they cannot sell to us individually. The company wants us to come in groups (a cartel), which we have already done.
“We have submitted an application. Until the present day, Dangote Refinery has yet to register us, talk-less of going to lift the product… (When) I called their attention, we were told to wait.” Maigandi is probably suggesting that oil marketers may not stop importation of petrol because of the pricing template and challenges they face in trying to do business with Dangote Refinery.
Also, Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN) expresses willingness to buy petrol from Dangote Refinery, but reports that its many approaches to Dangote Refinery were rebuffed or got not attention.
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Its president, Billy Gillis-Harry, explained, “PETROAN had written to him since 2022. We wanted to have a business meeting with him and understand the business dynamics. I sent the same letter to him (again) to ask for a meeting, so we can determine the modality… We cannot drive our tankers into the Dangote Refinery to start buying products just like that. We must have a business meeting to determine the modalities, to make our inputs and compare notes. We are willing to patronise Dangote…”
But MEMAN throws a curve, with a contrary claim: “We have substantial stocks of products in our tanks and/or access to considerable stocks in the tanks of our suppliers (including Dangote Refinery and NNPCL Trading Limited).”
Clement Isong, MEMAN Chief Executive Officer, adds that “MEMAN does not anticipate disruptions to the supply of petroleum products in the foreseeable future,” and concludes that there is really no need for what appears to be panic buying in recent times.
To reiterate the obvious, NNPCL, MEMAN and IPMAN, the downstream cartel, and midstream player, Dangote Refinery, want to dodge responsibility for the expected hike in petrol pump price, a result of government’s removal of petrol subsidy and putting the naira through the fiery furnace of harsh market forces.
President Tinubu deftly avoided the issue of the price of petrol when he held a meeting with members of the Implementation Committee on Crude Oil and Refined Products Sales in Local Currency, which included Aliko Dangote of Dangote Refinery, Mele Kyari of NNPCL and others.
He merely got Finance Minister Wale Edun, the Committee’s chairman, to rehash the “goodness” in selling petroleum and petroleum products in naira, and assure Nigerians that he would not reverse the novel policy.
But as the ability of government to ensure regular supply of petrol and tame the price of the product seem to be in doubt, consumers can only throw up their hands up with the cautious phrase, “The jury is still out,” the cop-out admission that the outcome is uncertain or undecided.
President Tinubu and Minister Edun must note that if Ghana truly means to import petroleum products from Dangote Refinery, it will take more than patriotism for Aliko Dangote to ignore the more than $400 million that Ghana pays to its European supplies. Nature, as the wise ones say, abhors a vacuum.
Government must lead the way out of the catch-22 situation. In doing this, it must be reminded of the constitutional provision that “the security and welfare of the people shall be the primary purpose of government.”
