The price of Dangote petroleum products, especially PMS has been a subject of intense public discourse recently.
This development has resulted in accusations and counter accusations between Dangote refinery on one hand and independent marketers, retail associations and petroleum importers, on the other hand.
There is increasing agitation and preference for importation of PMS by key sector players in the downstream industry, driven by the claim that the price of imported PMS is cheaper than the N990 per litre price of Dangote PMS.
The ongoing conflict between Dangote Refinery and downstream petroleum stakeholders appears to be a result of poor stakeholder engagement on the part of Dangote Refinery and lack of transparency in the pricing template of Dangote petroleum products.
Stakeholder Engagement by Dangote Refinery should have included a documented identification and analysis of key sector players such as PETROAN, and IPMAN and a stakeholder engagement plan to gain the support and buy-in for Dangote Refinery activities.
Unfortunately, this was ignored by Dangote refinery, resulting in the current state of conflict.
The lack of effective stakeholder engagement by Dangote refinery has led to undesirable outcomes including court case between Dangote Refinery and independent marketers such as AYM Shafa Limited, A. A. Rano Limited and Matrix Petroleum Services Limited.
The decision by Dangote Refinery to drag independent marketers to court is regrettable and stakeholder engagement should have been a better route.
The lack of transparency in product pricing by Dangote Refinery has also led to the sourcing of alternative solutions to PMS supply via temporary importation by key sector players including Petroleum Products Retail Outlets owners Association of Nigeria (PETROAN).
Independent Petroleum Marketers Association of Nigeria (IPMAN) has also voiced concerns about price gauging and fears of monopoly by Dangote refinery.
PETROAN, with over 35,000 Retail Outlets and more than 15,000 DPR license petroleum storage facilities (fuel dumps)
nationwide, under the visionary leadership of Dr Billy Sotubo Gillis- Harris, is a key sector player that should be carried along and engaged by Dangote refinery, in addition to other stakeholders such as Independent Petroleum Marketers Association of Nigeria (IPMAN).
The concerns raised by PETROAN, IPMAN and other sector players, in my opinion, are genuine and valid concerns which can be resolved by stakeholder engagement and transparency by Dangote Refinery.
It is in the interest of Dangote Refinery and Nigeria that the concerns of price gauging and monopoly raised by sector players such as PETROAN be interrogated and resolved through effective stakeholder engagement.
As a patriotic Nigerian, I join millions of Nigerians to call on Dangote Refinery to adopt transparency in the pricing of petroleum products delivered by the refinery.
The Government has provided incentives to ensure affordable locally produced PMS by Dangote refinery. This include the Naira for crude deal and a low tax regime.
We expect the price of Dangote Petroleum products to be lower than imported products due to cost saving of freight, foreign exchange charges, financing, insurance, port and jetty charges.
If it is proven that importing PMS is cheaper than offloading from Dangote refinery, then it would imply that price of Dangote Petroleum products are overpriced and that would be most unfortunate.
Dangote Refinery has an obligation to abide by fair business practices, in addition to moral and ethical obligations.
Olufemi Adegbulugbe, PfMP, PgMP, PMP, P.Geo, Oil & Gas Portfolio Manager writes from Alberta, Canada.
