The President of the Dangote Group, Aliko Dangote, has raised concerns over rising logistics and regulatory bottlenecks stifling its competitiveness, disclosing that port-related charges have made it more expensive for oil marketers to lift products from its Lekki-based refinery than from offshore storage depots in neighbouring countries like Togo.
The businessman noted that domestic marketers are grappling with multiple charges levied at both the point of loading and discharge when sourcing products from the $20bn refinery, a cost structure not applicable when importing from offshore terminals like the Lomé Floating Storage Terminal.
“In terms of port charges, it is currently more expensive to load a domestic cargo of petroleum products from the Dangote Refinery, as customers pay both at the point of loading and at the point of discharge. But when they
load from Lome, which competes with us, they pay only at the point of discharge. This is simply unfair and unsustainable,” Dangote lamented.
He stated that such a structure inadvertently incentivises fuel importation over local refining, defeating the purpose of self-sufficiency and the Federal Government’s plan to curb foreign exchange pressure.
Further findings by our correspondent revealed that this extra charge is being borne by marketers who buy products from the refinery.
Reacting, the Independent Petroleum Marketers Association of Nigeria National Publicity Secretary, Chinedu Ukadike, however, clarified that the extra cost may not apply to local buyers but to marketers who go through coastal routes from other countries.
Ukadike, in a telephone interview on Wednesday, said that the peculiar may not be local marketers because they load products from the gantry.
He said this bottleneck fuels the 69 per cent continued import of refined petroleum products, making Africa a destination for cheap, often toxic petroleum products, many of which are blended to substandard levels that would not be permitted in Europe or North America.
He declared this at the just concluded Global Commodity Insights Conference on West Africa’s refined fuel market, jointly organised by the NMDPRA and S&P Global Commodity Insights in Abuja.
He said, “We don’t load in Lomé, but for Nigerian distribution through the coastal route, it is easier to use the vessels here in Nigeria because it is interstate. Most of the international clearance and the rest is not applicable, because you would be able to avoid a lot of charges, both international and local charges.
“It is better to load from Dangote via both means. But if you are loading coastal from another country, it is more difficult than when you are loading from Nigeria.”
Oil and gas analyst and Chief Executive Officer of Petroleumprice, Olatide Jeremiah, said the low octane rating of imported petrol potentially reduces its landing costs.
In another development, petroleum marketers under the aegis of the Depot and Petroleum Products Marketers Association of Nigeria have accused the Dangote refinery of deploying restrictive sales strategies and pricing models that hinder open market access and fuel competition in the downstream sector.
