President of the Petroleum Products Retail Outlets Owners Association, PETROAN, Billy Gillis-Harry in this exclusive interview with correspondent, Ariemu Ogaga explains that Nigerians should trend with caution over Dangote Refinery and its fuel price regime in the coming months to avoid cannibalization of small businesses in the oil & gas sector. He also lays bare issues affecting the sector vis-a-vis the Nigerian economy.
Aliko Dangote projected that by mid-July (Now August), his refinery will come on board. What would that be for stakeholders and Nigerians?
Well, we want Dangote refinery to start producing on all four valves. All valves should be open and wide. However, there’s a need to be cautious about the development of the business. 650,000 barrels of crude oil and we’re very proud. As a Nigerian, I’m very proud. But I just hope that his pride will not keep me hungry without being in business.
Because right now, we’re doing our little businesses from importation. We’re doing it. To my knowledge, nobody has brought substandard products except when there was a general product of PMS that came in that of course explanations were given. To my knowledge, none of my members have come to say, Oh, we bought PMS as a company and the rating is low. Of course with our 3P’s solution, we also take measures on the product.
Believe me, I will not be able to say either yes or no but I think that such a broad-based allegation by Dangote Refinery should be backed with empirical evidence. It shouldn’t be just a one-off allegation because people are importing products. These products are going to be used like Shell and AGIP and different stakeholders in the industry that are using it to be able to further produce crude oil. So I mean, if there is a presentation like that, we should expect the houses also to come out and tell us the whole part of the story. And then of course Depots and Petroleum Products Marketers Association of Nigeria, DAPPMAN responded by saying oh, sorry, our members are not bringing it.
I will also stand to say that PETROAN members have not imported any dirty diesel. For PMS we’re not bringing it because it is regulated. Nobody is going to bring PMS today, land at close to N1000, sell for five hundred and something. So that’s not just going to be possible. You know, so the government must do their social engineering to work out that type of economic activity, which only then we’ll understand, because they’re not discussing that with us in the public. So we are not going to know as to what is the size of the subsidy, the recovery or the assistance. It seems we do not even want to call it a subsidy, but that’s what it is.
I keep explaining this. If we bought products from NNPCL, we are duty-bound to sell them within N626, N650 bandwidth. But if we source for products from the first tier, second tier, four tier rule, by the time the product lands, you cannot genuinely expect that the product will be sold for less than N700 or even a little bit above. And of course, there are places where the products were selling much higher. Because what accounts for that is the logistics. To land the products in the filling station. But in petrol, because of our disciplined approach to the industry, we try to make sure that we have empirical evidence. When to buy the product, what is the cost of your landing? So we too can be able to stand to defend you or to also castigate you.
Because if you’re doing something that’s completely taking undue advantage of the Nigerian public, we must report you and be able to get solutions to that so you don’t do that in the future. So that’s why we insist that NNPCL should always give us access to products because when they give us products, then we can within ourselves self-regulate and make sure that none of our members who bought products from the NNPCL will sell above the price that is already there.
What are the implications for Nigeria if Dangote Refinery becomes a refiner of fuel?
Well, I do think that the Dangote refinery has invested so many billions of dollars there. But those profits cannot come over just overnight. So it must be a planned process to gradually do cost recovery benefits and all of this. So don’t forget that it is a private business, even though the government through NNPC has now got a share on our behalf. We all have a share in Dangote but at the end of the day, we need to call for caution in the pricing regime.
Again, we advise Dangote to also have stakeholders’ meetings consistently to be able to review what the industry is saying. So that it doesn’t put the price as if it’s going to be a monopoly. We’ll have to be very careful about that. Because we need all the segments of the industry to be active, even those who have just one filling station are using that to feed families. So we do not want that segment of the economy to be whittled out or whittled down completely.