Members of the Major Energies Marketers Association of Nigeria plan to consult with the Dangote Petroleum Refinery to gain a clearer understanding of its strategy to begin direct fuel supply to filling stations across the country.
The Executive Secretary of MEMAN, Clement Isong, made this known during a webinar hosted by the association on Thursday.
Isong explained that the marketers also intend to engage the Nigerian Midstream and Downstream Petroleum Regulatory Authority along with other key stakeholders as they work to understand the details of the new distribution model introduced by the Dangote refinery.
“At this point, we are watching the market, trying to understand it. We have read it in the news. We need to understand exactly where it impacts and what it impacts before we can have some clarity as to how far it will go in terms of impact.
“And that requires a lot of discussion; discussion with Dangote himself, discussion with the authorities, discussion with other stakeholders. At some point in time, we shall engage and do what is necessary to protect the market should we have to do so. But for now, we are trying to understand exactly what this initiative is and how it will impact the market.
“It would be irresponsible of us to say anything before being clear as to exactly what it means. We are not clear, for instance, whether it means that there is an equalisation policy, whether it means the same price everywhere in the country, we don’t know. Until we have clarity as to exactly what the initiative is, before we can engage,” he said.
Nonetheless, Isong acknowledged that the refinery’s proposal to use Compressed Natural Gas-powered trucks for fuel distribution is a promising development, although he noted the current limitations in infrastructure.
“CNG is a policy of the government. It’s a policy still in implementation. We do not have enough CNG infrastructure in place. So, a lot of planning has to be done to be able to implement it. Bold companies are companies that will take advantage of available opportunities. So, distribution by CNG trucks is one of the available opportunities, so far as you’re able to make it work for you,” he said.
Addressing concerns over possible market dominance and anti-competitive practices, Isong emphasized the importance of regulatory oversight in distinguishing between innovation and harmful dominance.
“It is a continuous debate, a continuous engagement that we all have to help them to find the balance, the equilibrium, and what is best for the market. But we have consistently asked for deregulation, we’ve consistently asked for open market competition, and we’ve consistently said it would bring innovation. This innovation, that is transportation by CNG, is one that we have identified, and we have encouraged our members to take advantage of,” he added.
On Sunday, Dangote refinery announced it would begin the direct delivery of petroleum products to filling stations and stakeholders nationwide. The initiative is set to launch on August 15 using 4,000 brand new CNG-powered trucks.