Chairman of Integrated Oil and Gas Company, Captain Emmanuel Iheanacho (retd.), has criticised billionaire and Geregu Power Chairman, Femi Otedola’s call on oil trading companies in the country to dismantle their depots and sell them for scrap after Dangote refinery began producing gasoline.
Iheanacho, in a statement on Wednesday, stressed the essential role of depot owners in Nigeria’s fuel supply chain, especially with regard to gasoline supply through the Dangote refinery, which pumps 650,000 barrels per day.
Femi Otedola sparked controversy on Tuesday with a social media post on X suggesting that Nigerian depot owners should demolish their facilities and sell the materials as scrap. His comment came shortly after Aliko Dangote, President of Dangote Group, showcased samples of petrol produced from his newly operational $20 billion refinery during a live broadcast. Otedola’s post implied that the arrival of Dangote’s refined petrol makes the existing depots obsolete.
Iheanacho, who is also a member of the Depots and Petroleum Products Marketers Association of Nigeria (DAPPMAN), clarified that petroleum product depots are a vital part of the fuel supply chain and complement the primary fuel source. He stressed that without these depots, other elements of 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 warehouses play a vital role in logistics, especially given that Nigeria’s infrastructure is scattered.
He also noted that while private warehouses may compete with the Nigerian National Petroleum Corporation (NNPC) in terms of storage and distribution, they are not necessarily in direct competition with the NNPC or the Dangote Refinery.
Iheanacho argued, “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 the depots provide critical storage and distribution support to NNPCL and Dangote refineries as well as oil importers, ensuring a more efficient and reliable fuel supply network.
