By Bassey Udo
The recent faceoff between Dangote Petroleum Refinery and the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) appears to have taken a turn for the worse, as the company on Wednesday rejected the seven days ultimatum by the marketers over their demand for N1.5trillion subsidy before lifting petroleum products.
Dangote Refinery reiterated its stance on the matter in several media publications in which it challenged any aggrieved party to seek legal redress in court over its decision.
“We wish to clarify that the crux of DAPPMAN’s sustained attacks on Dangote Petroleum Refinery stems from their demand for an annual subsidy of N1.505 trillion to enable their members to match the refinery’s gantry prices at their own depots,” the company said in a statement.
Dangote Refinery explained that while petroleum products are offered to marketers at its ex-depot price, DAPPMAN has continued to insist on receiving same using coastal logistics and facilities.
The company argued that if the preferred option by the marketers was adopted, it would inject an additional N75 cost to the current retail pump price of pump price of N841 per lire in Lagos and other parts of the South West and N851 per litre in Abuja and it’s environs.
Under an arrangement to ensure a smooth distribution and supply of petroleum products across the country, the company recently announced a new ex-depot price of N820 per lire in addition to an arrangement for free deliveries of products to about 11 states of the Federation
A breakdown of the additional N75 cost to the retail pump price based on projected daily consumption volumes of 40 million litres of Premium Motor Spirit (PMS), popularly called petrol, and 15 million litres of Automotive Gas Oil (AGO), or diesel, would cost Dangote Refinery about N1.506 trillion annually.
Specifically, the Dangote Refinery said despite dispensing products to the marketers at its ex-depot price of N820 per litre, they are demanding an additional discount of N70 per litre in various costs associated with coastal freight, Nigerian Maritime Administration and Safety Agency (NIMASA), Nigerian Ports Authority (NPA) and other associated charges, apart from another N5 per litre for the cost of pumping products into vessels for transportation from the refinery to the marketers depots in Apapa.
However, the company made it clear on Wednesday that it had no intention of either increasing its ex-depot price to accommodate the marketers’ demands, or would be willing to pay a subsidy of over N1.5 trillion per annum to the marketers.
While welcoming DAPPMAN and other marketers of petroleum products to lift its products directly from the refinery and benefit from its offer of free delivery logistics, the company vowed not to tread the subsidy path, which resulted in the Federal Government being defrauded for many years.
“The Dangote Petroleum Refinery has sufficient capacity to meet domestic demand and support export. We consistently maintain a closing stock of 500 million litres of refined products in our tanks each month,” the company said.
“Between June and September, the refinery exported a combined total of 3,229,881 metric tonnes of PMS, AGO, and aviation fuel, while marketers imported 3,687,828 metric tonnes over the same period, an action that amounts to dumping which is detrimental to the Nigerian economy and the wellbeing of its citizens,” it added.
The company said it remained steadfast in its support for the reform initiatives of present administration in the petroleum sector, adding that through various strategic efforts, it demonstrated its commitment to stabilising the Naira, cushioning the effects of fuel subsidy removal, positioning Nigeria as a refining hub, boosting foreign exchange earnings, and creating employment opportunities, among others.
Reiterating its commitment to support government’s efforts to stabilize the economy, the company said it would not hesitate to work with government agencies to hold institutions accountable where necessary.
“Dangote Petroleum Refinery remains firmly committed to the progress and wellbeing of Nigeria, and is open to partnerships with patriotic and responsible stakeholders in pursuit of national development,” the company said.
