Marketer Faults Otedola’s Call on Depot Owners to Sell Facilities As Scrap

Peter Uzoho 

The Chairman of Integrated Oil and Gas Ltd., Capt. Emmanuel Iheanacho (rtd), has faulted the call by billionaire businessman and Chairman of Geregu Power Plc, Mr. Femi Otedola, for petroleum marketers in the country to dismantle their depots and sell them as scrap following the commencement of petrol production by Dangote Refinery.

In a statement issued on Wednesday, Iheanacho emphasised the indispensable role of depot owners in Nigeria’s fuel supply chain, particularly in the context of the delivery of petrol by the 650,000 barrels per day Dangote Refinery.

Otedola had, in a post on X on Tuesday shortly after a live broadcast by the President of Dangote Group, Aliko Dangote, who displayed samples of petrol produced from his $20 billion refinery, suggested that Nigerian depot owners should dismantle their facilities and sell them as scrap, given the arrival of Dangote’s petrol.

Iheanacho, who is also a member of the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), clarified that petroleum products storage depots were a vital component of the fuel supply chain, complementing primary fuel sources.

He stressed that without these depots, other elements in the supply chain would struggle to deliver fuel to consumers.

“While there might be competitive elements in the market, collaboration and cooperation are essential for ensuring a stable fuel supply in Nigeria.

“Petroleum depots are not a replacement for primary fuel sources but are crucial for storing and distributing products to meet demand,” Iheanacho said. 

He added that depots play an important role in distribution, particularly given Nigeria’s dispersed infrastructure. 

He also noted that while private depots may compete with the Nigerian National Petroleum Company (NNPC) Limited in terms of storage and distribution, they were not necessarily in direct competition with the NNPC or the Dangote Refinery.

Iheanacho maintained: “Instead, these depots often work in conjunction with both to support a reliable fuel supply chain.

“Private depots may compete with petroleum importers for market share by offering essential storage and distribution services.

“Ultimately, competition aims to balance market prices.

“However, depots are key partners in supporting the entire supply chain, including NNPC and Dangote.” 

He concluded that depots provide critical storage and distribution support not only for NNPCL and Dangote Refinery but also for petroleum importers, ensuring a more efficient and reliable fuel supply network.