May God save us from our ‘frienemies’; that is, enemies who pose as friends. Can you imagine the middlemen who have held the petroleum distribution sector by the jugular over the years, screaming that they have been doing it all for the sake of the people? Can you beat that?
In an earlier intervention on this subject, I had described their relationship with the motoring public as follows: “You perch on my overburdened back while assuring me that you would do anything to lighten my distress, except getting off my back! That is the assurance that Nigeria’s petroleum middlemen keep giving Nigerians….”
Middlemen
These middlemen, who own tank farms, articulated tankers, and barges, used to determine the pump price of petroleum products, and many of them were part of the criminal ring that fleeced Nigeria dry over subsidy claims. At the height of the heist during the Buhari regime, based on statistics from opaque subsidy claims, the government estimated that there were close to 60 million vehicles on the road. Now that subsidies are gone, we are suddenly confronted with the reality that we have less than 14 million vehicles on the road — (actual estimate is 13.9 million out of which 11.8 million are private).
So far, nobody has been prosecuted for collecting billions of Naira based on fraudulent claims. Impunity is the name of the game. NNPCL, which was supposed to be the gatekeeper, was no different from the pilferers as they were all united in their greed. Surely, somebody ought to account for the magical disappearance of over 45 million subsidy-gulping ghost vehicles from Nigerian highways?
The stench in NNPCL was particularly rancid as the organisation spent over $25 billion or 11.35 trillion Naira to fix, unfix, and refix the four government-owned refineries which never produced satisfactory results but were rumoured to be capable of producing at 40 percent capacity. The more we looked, the less we saw.
When President Tinubu named himself petroleum minister, many insiders in the industry said that nothing short of a presidential whip was required to make the dodgy players in the sector fall back into line. Providentially for the administration, the much-expected Dangote Petroleum Refinery came on stream to provide the much-needed succour.
Dangote has the capacity to satisfy Nigeria’s domestic requirements for petroleum products and still meet export commitments. That fact was not good news to those who had made their fortune from importation and subsidy claims. Together with NNPCL at the time, they tried to place one hurdle after another in the way of the new refinery. The middlemen wanted Dangote to just concentrate on bringing out the products and leave final pricing and delivery to them so that they could add their usual insane percentages on the product and continue picking our pockets.
NNPCL’s Role
It was the height of all scandals as the government-owned NNPCL was importing petrol and distributing it through its channels nationwide. Importers plainly told Alhaji Aliko Dangote to succumb to their demands otherwise they would cripple his business. They tried to wage a price and product quality war, but they failed.
Nigerians couldn’t believe what was happening as Dangote Refinery resorted to importing crude oil for refining when the NNPCL was unable to fulfil its promise of ensuring a regular supply. At the moment, Dangote is spending 650 million dollars every month importing crude oil into Nigeria to refine!
Last year, NNPCL pledged 272,500 barrels per day of crude oil through a series of crude-for-loan deals totalling $8.86 billion, meaning that about 8.17 million barrels of crude would be used for different loan deals by the national oil firm every month. There is a handsome gap between the current total production figures and the volume earmarked for loan settlement.
Nigerians say that the allocation of crude oil to the Dangote Refinery should be given topmost priority. If Dangote can ensure regular supply at a reasonable price to the people, he would have removed one of the serious impediments to national security and industrial growth in the country.
CNG Trucks
On the logistics front, in a bid to enhance energy efficiency and promote environmental sustainability, Dangote Petroleum Refinery invested over N720 billion to deploy 4,000 Compressed Natural Gas (CNG)-powered trucks for the nationwide distribution of its products. The move is expected to save Nigerians over N1.7 trillion annually. Independent petroleum marketers who had been suffering supply bottlenecks and exorbitant depot charges for many years can now heave a sigh of relief.
The middlemen-led campaign of not allowing Dangote to run a monopoly fell flat on its face. Those who want to claim that they want to prevent a monopoly are themselves trying to monopolise petroleum distribution. They want Dangote to remove his hands from delivery, claiming that they have over 3,000 trucks and thousands of drivers who will be rendered jobless.
An energy expert, Kevin Emmanuel explained what Dangote’s direct trucking plan is designed to achieve: “If you are a fuel station owner, just focus on dispensing the product and running your pumps. Place your order for fuel, make payments, and my trucks will get to you. If you intend to set up a fuel station as an entrepreneur, don’t worry about buying five trucks, hiring and managing 10 drivers and motor boys, worrying about parking fees in truck yards, or maintaining truck fleets. Build your fuel station, order my products, and I will deliver them anywhere you are.“
NUPENG Weaponises Unionism
When the National Union of Petroleum and Natural Gas Workers (NUPENG) waded in, it announced its intention to go on strike over Dangote Refinery’s alleged refusal to allow its workers to join the union. There was so much disinformation in the air, some of it apparently sponsored by the unseen hands of middlemen. But a government-brokered truce resolved the matter by reaffirming the right of Dangote workers to freely belong to, or refrain from belonging to any union. Twenty-four hours later, however, the unionists were back at the barricades, alleging that Dangote had breached the agreement.
NUPENG even went to the extent of disrupting the loading of products from the private refinery. All that gangsterism was perpetrated under the guise of unionism!
One commentator, Nuhu Aliyu, worked out the math behind the crisis. By his calculation, since the Dangote Refinery produces 57 million litres of petrol daily, and another 104 million litres of different petroleum products including jet fuel and diesel, “NUPENG stands to lose a total of 4.8 billion Naira if it loses the fight against Dangote. Remember for every litre of petrol you buy, N1 goes to these economic wreckers.”
By contrast, the Independent Petroleum Marketers Association of Nigeria (IPMAN) is quite happy to patronise the Dangote Refinery. Its spokesperson confirmed that, “IPMAN’s direct purchase agreement with Dangote influenced the dwindling price of petrol because it has eradicated the issue of middlemen and profiteering of petroleum products.”
Dangote’s CNG initiative is bearing fruit in other related areas too. The Commercial Coordinator of the Presidential Compressed Natural Gas Initiative recently gave a thumbs-up to the new private refinery: “We see the Dangote Group as a cornerstone partner in achieving nationwide penetration of CNG technology, particularly in the haulage and industrial logistics space. Our partnership will focus on regulatory support for their CNG vehicle and daughter station rollout …”
Hopefully, with the typically Nigerian obstacles now removed, Nigerians can look forward to better motoring days marked by fuel availability and relative affordability. Erstwhile middlemen are hereby challenged to also build their own refineries to compete with Dangote.
The crooked old game is over!
