Dangote Refinery Refutes ₦1.5trn Subsidy Claim By Fuel Marketers.

Dangote.

Dangote Petroleum Refinery has restated its stance in the ongoing disagreement with the Depot and Petroleum Products Marketers Association of Nigeria, asserting that it will not shoulder logistics expenses, which marketers are attempting to present as a form of subsidy.

This latest dispute between Dangote Petroleum Refinery and DAPPMAN emerges amid growing public concern regarding fuel prices and the challenges of distribution logistics.

DAPPMAN, whose members operate a majority of the privately owned depots across the country, had argued that transporting products from the refinery’s location in Lagos to other regions in Nigeria incurs significant costs in logistics and coastal shipping.

In a statement released on Dangote Group’s official X account on Thursday, titled “We Stand By Our Statement on DAPPMAN … Marketers’ ₦1.505trn Subsidy Demand” and signed by management, the refinery insisted that it is entitled to defend its operations against inaccurate reporting.

“Dangote Petroleum Refinery stands by its statement on the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), as published on Monday, September 15, in the following national newspapers: The Guardian, ThisDay, The Punch, Daily Trust, Nigerian Tribune, Daily Sun, Vanguard, The Nation, BusinessDay, Leadership, Daily Independent, and Blueprint."

“We wish to emphasise that any party who feels aggrieved with the contents of the publication is free to seek redress in court. We have the right under Nigerian law to defend ourselves against slander, falsehood, and any misleading or concocted story that could damage our reputation,” the statement partly read.

The company rejected the claims by marketers, who alleged a subsidy burden amounting to more than ₦1.5 trillion. It also clarified that sales are conducted at its gantry based on production costs and regulated margins, with no concealed subsidies.

“Specifically, we note the crux of DAPPMAN’s assertion was that Dangote Petroleum Refinery subsidy on sales of petroleum products (PMS & AGO) to the tune of ₦1.505 trillion (One Trillion, Five Hundred and Five Billion, Six Hundred and Twenty-Five Million Naira), which we are to pay marketers as subsidy."

“We note that petroleum products to marketers are sold at our gantry at prices based on our production costs, plus a regulated margin on products consumed nationwide. DAPPMAN’s claim of subsidy is false and unfounded. Our actual logistics cost of distribution is borne by marketers, who bear the cost of transporting products to their depots nationwide."

“We are fully responsible for all supply and consumption volumes of millions of litres of Premium Motor Spirit (PMS) and Automotive Gas Oil (AGO), which is an additional investment cost of ₦1,505,625,000,000 only, as they are effectively asking us to absorb on their behalf.”

The refinery accused marketers of attempting to shift the financial responsibility of coastal transportation onto Dangote.

“Specifically, the marketers are demanding that Dangote Petroleum Refinery take on the cost of moving products to their coastal depots nationwide through coastal vessels, in addition to loading at our refinery gantry, which is already at par with NNPC Ltd, International Oil Companies (IOCs), and other international refineries,” the refinery added.

The company reiterated that the federal government officially removed the fuel subsidy in May 2023, and therefore, the refinery is under no obligation to bear distribution costs for marketers.

“We note that in June this year, we made it clear that there is no subsidy in our pricing template, nor have we entered into any agreement with marketers to subsidise petroleum products. We reiterate that subsidy on petroleum products was removed by the Federal Government in May 2023, and as such, we cannot be coerced into absorbing the cost of marketers’ distribution,” the statement continued.

Emphasising its logistics capability, Dangote pointed out that it had successfully distributed fuel nationwide through its road and rail networks since beginning operations.

“Dangote Petroleum Refinery has sufficient logistics to distribute fuel nationwide through road and rail infrastructure, which has been tested in the past three months between June and September. The refinery completed a combined 3,478,228 tanker movements over the same period, ensuring a sustained supply of petroleum products nationwide,” the refinery added.

The management described the assertions made by DAPPMAN as “wrong and misleading”, while reaffirming its commitment to affordable supply and energy stability.

“It is therefore wrong and misleading for marketers to suggest otherwise. We assure Nigerians that we will continue to supply products to all parts of the country at the same price from our refinery gantry."

“We remain committed to ensuring energy security in Nigeria, delivering products at affordable prices, and working with all stakeholders in the downstream sector towards achieving lasting stability in the nation’s petroleum industry,” the statement stated.

Towards the end of the statement, the refinery included a breakdown of the logistics costs that marketers allegedly attempted to transfer to it.

Summarising the breakdown, the company stated, “₦1,505,625,000,000 is the total amount requested by marketers from Dangote as a subsidy to enable them to sell at the same price as our gantry at their depots.”

The dispute between the refinery and petroleum marketers has arisen amid a nationwide strike recently declared by the Nigeria Union of Petroleum and Natural Gas Workers.

The union began the industrial action over longstanding issues concerning workers’ welfare, job security, and what it described as authoritarian practices within the downstream sector.

The strike temporarily disrupted the distribution of fuel and triggered fears of scarcity in several parts of the country, once again highlighting the fragility of Nigeria’s petroleum supply network.

It also reignited public debate on the consequences of deregulation and the elimination of subsidy, with unions and stakeholders warning that the burden of cost-saving and efficiency reforms is increasingly being borne by workers and consumers.