NOGASA urges government intervention as Dangote refinery’s direct supply plan sparks industry fears

The Natural Oil and Gas Suppliers Association of Nigeria (NOGASA) has issued a plea to the Federal Government to intervene in what it describes as Dangote Refinery’s plan to bypass traditional distributors and supply petroleum products directly to consumers.

NOGASA warns that this strategic shift could severely disrupt the oil and gas industry, jeopardize thousands of jobs, and undermine the existing business models of suppliers nationwide.

Speaking at the association’s Annual General Meeting on Thursday in Abuja, NOGASA’s President, Benneth Korie, urged the Dangote Refinery to concentrate on its core function of refining and selling products to marketers, who in turn distribute to end users.

The call comes in response to Dangote Refinery’s recent announcement that it intends to begin direct supply of petroleum products to end users from August 15.

The refinery has reportedly acquired 4,000 distribution trucks for this purpose, a move that has caused significant anxiety among marketers.

“So today again, we are pleading for President Bola Tinubu to intervene in this matter by telling Dangote to slow down, and go by the rules of the game,” Korie stated.

“Nobody is against the refinery… We urge Dangote to concentrate on the refinery and remove hand from this direct distribution, we are capable to distribute products.”

Korie explained that the association is keen to maintain stability in the industry and does not want a repeat of the experience marketers had with the Nigerian National Petroleum Company Limited (NNPC) Ltd.

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He recalled that while NNPC Ltd. initially distributed products smoothly through its subsidiary, the Pipelines and Products Marketing Company (PPMC), this system was disrupted when it began focusing solely on direct supply to its own outlets.

According to Korie, this shift in focus led to the decline of NNPC’s refineries, as the company became overburdened with blending, crude sales, and retail operations simultaneously.

He advised the management of Dangote Refinery to engage constructively with relevant stakeholders in the petroleum distribution and marketing sectors to address these concerns.

Mr. Ugochinyere Ikenga ,Chairman of the House Committee on Petroleum Resources, Downstream, represented by Mr. Saba Ahmed, assured the marketers that the National Assembly is aware of the situation and is carefully looking into Dangote’s move.

“This is a big change, and I want to assure you that we are carefully looking into this situation,” Ikenga’s representative stated, acknowledging the committee’s goal to create a scenario where everyone can succeed by adhering to the rules set in the Petroleum Industry Act (PIA).

Echoing these concerns, Dr. Billy Gillis-Harry, National President of the Petroleum Product Retail Outlets Association of Nigeria (PETROAN), raised an alarm about potential job losses and business shutdowns.

He argued that with a production capacity of 650,000 barrels per day (now up to 700,000), the Dangote Refinery should be “competing with global refineries, not operating as a distributor in the downstream.”

In his remarks, Gen. Christopher Musa, Chief of Defence Staff, represented by Rear Admiral Jonathan Mamman, urged the association to remain resolute in its duties of ensuring smooth petroleum distribution.

He also encouraged marketers to facilitate the expansion of Compressed Natural Gas (CNG) infrastructure and the penetration of Liquefied Natural Gas (LNG) in remote areas of the country.