Dangote Choice Of Distributors Bad For Marketers – Obele

The management of Dangote Group last weekend declared that its refinery located in Lekki Lagos had commenced production of diesel and aviation fuel after receiving six million barrels of the Bonny Light Crude.
The company also announced the appointment of seven major petroleum products marketing companies including NNPC Ltd as direct marketers of products from the refinery.
But a leading petroleum products marketer, Dr. Joseph Obele, has said that the appointment of the seven marketers to lift Dangote refinery products could spell doom for the industry.
Though Obele, who is also a lecturer in marketing at Ignatius Ajuru University, Port Harcourt commended the start of production by Dangote Refinery, he said licencing only seven marketers would throw many other marketers out of business and occasion massive loss of jobs.
He said, “The implication of forward integration marketing strategy by Dangote PLC is the fact that most retail outlets will be out of business following inability to withstand intense competition with Dangote group.
“This will lead to numerous job losses, franchising of retail outlets to Dangote brand and rapid sales of most filling stations by owners.”
He said that the impact of distribution at the downstream sector can only be felt through competition by independent marketers.
He therefore called on the Management of Dangote PLC to extend the registration of takeoff marketers to key independent marketers in view of giving competition to the major marketers as against price rigging.
Dr. Obele said that it was indeed shameful that NNPL Ltd could apply to be a marketer of Dangote refinery products when indeed it mismanaged the distribution of petroleum products of NNPC refineries that led to the collapse of the four NNPC refineries.
He said the celebration of the lighting of the flare of the old Port Harcourt refinery last December was a political orchestration to justify government’s failed promise to bring the Port Harcourt refinery back on stream before the end of last year. “Hence they hurriedly put on the flame in the month of December and switched it off same day. As we speak the celebrated flame is off.”
He however said commencement of production at the refinery could be by March 2024. “But most worrisome is who will manage the plant after the rehabilitation? Will it be privatised? It is obvious that a government owned organisation like NNPC cannot survive a competitive threat posed by Dangote PLC.
“I hereby recommend that the Port Harcourt refinery should be privatised to a reputation foreign company immediately so that Dangote Refinery will not enjoy monopoly by becoming the sole seller at high rate. By this, consumers will have the best price for petroleum products arising from market forces,” Dr. Obele said.
Responding to the arrest of the vessel, MT Kally with 200,000 litres of stolen crude oil last weekend by a joint operation by the officials of Tantita Security and Surveillance Ltd, owned by Government ‘Tompolo’ Edemupolo, and operatives of the Nigerian Security and Civil Defence Corps (NSCDC), Obele called for thorough investigation.
“Nigerians are waiting for the outcome of this very investigation. If it will end like every other previous investigation of crude oil theft.
“Crude oil theft is a business for the high class cabal. An average person in the society cannot participate in the degree of illegal business.
“The impact of crude oil theft reflects negatively on the nation’s revenue. So we call our security agencies on the high sea and land not to compromise but rather redouble efforts in combating crude oil theft.”