Photo caption: MEMAN logo
Members of the Major Energies Marketers Association of Nigeria (MEMAN) might dialogue with the management of Dangote Petroleum Refinery over its recent announcement of plans to begin distribution of petroleum products across the country but that would be dependent on the marketers’ full understanding of the initiative and its impact on the market,
The Executive Secretary of MEMAN, Clement Isong, stated this during the MEMAN’s virtual quarterly press briefing on Thursday.
Isong noted that the marketers would also engage with the Nigerian Midstream and Downstream Petroleum Regulatory Authority and other stakeholders as they took time to understand the new scheme from 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 and what it impacts before we can have some clarity as to how far it will go in terms of impact.
Photo caption: Executive Secretary of MEMAN, Clement Isong
“And that requires a lot of discussions – 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 – which means the price will be same everywhere in the country, we don’t know yet. Until we have clarity as to exactly what the initiative is, before we can engage,” he said.
However, Isong noted that Dangote’s plan to distribute Compressed Natural Gas through trucks was and advantage and a good development even though there was not enough infrastructure in place. He said the distribution would reduce operational cost by between 30% and 40%, which is huge.
“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. Big companies are the ones that will take advantage of the available opportunities. So, distribution of CNG by trucks is one of the available opportunities. It is an advantage and many companies are planning to tap into it but maybe because they (Dangote Refinery) have the resources, they are ahead of others. Currently, Dangote has about 2000 trucks that run on CNG,” he said.
On allegations of dominance and anti-competitive activities in the sector, Isong explained that it was the job of the regulators to consistently measure what is innovation, what is for the ultimate benefit of the consumer, and where the risk of dominance begins to play a negative role.
“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, the Dangote refinery unveiled plans to start direct distribution of petroleum products to filling stations and other stakeholders across the country. The scheme would commence on August 15 with brand new 4,000 CNG trucks.
