Dangote Refinery speaks on dispute with DAPPMAN over N1.5 trillion subsidy demand which would add N75 per litre to fuel costs

Dangote Refinery speaks on dispute with DAPPMAN over N1.5 trillion subsidy demand which would add N75 per litre to fuel costs.

According to Dangote Refinery, marketers are requesting a subsidy of N1.5 trillion to align with the refinery’s gantry prices.

Dangote Refinery has accused that DAPPMAN is requesting an annual subsidy of N1.505 trillion. This subsidy, according to the accusation, would allow their members to align their depot prices with the prices set at the refinery’s gantry.

The company alleged the association is demanding a subsidy to cover additional logistics costs tied to transporting products from the refinery to their depots via coastal logistics, which would add N75 per litre to fuel costs.

The Dangote Petroleum Refinery said the ongoing dispute with the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) stems over the latter’s demand for an annual subsidy of N1.505 trillion to enable members to match the refinery’s gantry prices at their own depots.

In a statement signed by its management, the company alleged the association is demanding a subsidy to cover additional logistics costs tied to transporting products from the refinery to their depots via coastal logistics, which would add N75 per litre to fuel costs.

The refinery added that the association effectively asked it to absorb the cost or pass it on to consumers.

“We wish to clarify that the crux of DAPPMAN’s sustained attacks on Dangote Petroleum Refinery stems from their demand for an annual subsidy of N1.505 trillion to enable their members to match the refinery’s gantry prices at their own depots.

“While we offer petroleum products to marketers at our gantry price, DAPPMAN insists on receiving products via coastal logistics, an option that would add N75 per litre in additional costs,” the statement said.

It explained that based on projected daily consumption volumes of 40 million litres of petrol and 15 million litres of Automotive Gas Oil (AGO), this amounts to an additional annual cost of N1.505 trillion (N1,505,625,000,000), “which they are effectively asking us to absorb and pass it on to consumers.”

Specifically, the refinery said, the marketers are demanding that it discount N70/litre in coastal freight, Nigerian Maritime Administration and Safety Agency, (NIMASA), Nigerian Ports Authority (NPA) and other associated costs as well as N5/litre for the cost of pumping into vessels to enable them to transport products from its refinery to their depots in Apapa and sell at the same price as its gantry.

“We wish to make it clear that we have no intention of increasing our gantry price to accommodate such demands, nor are we willing to pay a subsidy of over N1.5 trillion, a practice that historically defrauded the federal government for many years,” it said

It said DAPPMAN and other marketers are welcome to lift products directly from its gantry and benefit from its logistics-free initiative.

The Dangote Petroleum Refinery said it has sufficient capacity to meet domestic demand and support exports.

“We consistently maintain a closing stock of 500 million litres of refined products in our tanks each month. Between June and September, the refinery exported a combined total of 3,229,881 metric tonnes of petrol, AGO, and aviation fuel, while marketers imported 3,687,828 metric tonnes over the same period, an action that amounts to dumping which is detrimental to the Nigerian economy and the wellbeing of its citizens,” it added.

The refinery said it remains steadfast in its support for the reform initiatives of President Bola Tinubu.

“Through various strategic efforts, we have demonstrated our commitment to stabilising the Naira, cushioning the effects of fuel subsidy removal, positioning Nigeria as a refining hub, boosting foreign exchange earnings, and creating employment opportunities among others.

“We enjoy strong working relationships with government agencies and remain committed to supporting their efforts, while not hesitating to hold institutions accountable where necessary.

“Dangote Petroleum Refinery remains firmly committed to the progress and wellbeing of Nigeria, and is open to partnerships with patriotic and responsible stakeholders in pursuit of national development,” the statement said

Dangote Refinery in an advertorial piece signed by its management, accused DAPPMAN of attempting to sabotage its efforts to boost Nigeria’s energy self-sufficiency.

The refinery also accused DAPPMAN of engaging in “round-tripping,” where petrol produced by the refinery is re-imported from Togo into Nigeria at a markup. The refinery also claimed that DAPPMAN’s members are exploiting arbitrage opportunities by diverting products to more lucrative markets in the sub-region.

On Wednesday, DAPPMAN denied these allegations and threatened to take legal action if the refinery does not retract its claims. The association argued that the refinery’s actions are aimed at monopolising the market and undermining competition.

Dangote Refinery emphasised that any party who feels aggrieved by the contents of its publication is entitled to seek redress through the appropriate legal channels, without recourse to any so-called seven-day notice.

“We are fully prepared to defend our position,” it said.