Dangote Refinery Rejects N1.5 Trillion Subsidy Demand from DAPPMAN

Dangote Petroleum Refinery has firmly rejected a demand from the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) for an annual subsidy of N1.505 trillion. The refinery’s management stated on September 28, 2023, that it will not comply with what it termed an unreasonable request and is prepared to face any legal challenges that may arise.

In an official statement, Dangote emphasized that any party dissatisfied with the situation could seek legal recourse. “We wish to emphasise that any party who feels aggrieved by the contents of the publication is entitled to seek redress through the appropriate legal channels,” the statement read. The refinery alleged that DAPPMAN’s ongoing criticisms are rooted in their demands for financial assistance to align their prices with those of the refinery.

The management detailed that DAPPMAN is seeking significant discounts, including N70 per litre in coastal freight and other associated costs. These demands also include a N5 per litre charge for pumping products into vessels. This would ostensibly allow marketers to sell at prices comparable to those at the refinery’s gantry.

Rejecting these requests, the refinery reiterated its commitment to maintaining stable pricing without resorting to subsidies. “We have no intention of increasing our gantry price to accommodate such demands,” the management stated, adding that subsidizing the oil sector has historically resulted in financial losses for the federal government.

Production Capacity and Economic Impact

Dangote Petroleum Refinery expressed confidence in its operational capabilities, asserting that it has the capacity to meet Nigeria’s domestic fuel demands while also supporting export activities. The refinery reported maintaining a monthly stock of 500 million litres of refined products. Between June and September, it exported a substantial 3,229,881 metric tonnes of refined products, contrasting this with the 3,687,828 metric tonnes imported by marketers during the same period, which the refinery described as “dumping” detrimental to Nigeria’s economy.

The management also communicated its alignment with national reforms led by President Bola Ahmed Tinubu. They highlighted their efforts to stabilize the Naira and mitigate the impact of fuel subsidy removal, reinforcing their role in establishing Nigeria as a refining hub and enhancing foreign exchange earnings.

Commitment to National Development

In conclusion, Dangote Petroleum Refinery reaffirmed its dedication to Nigeria’s progress and expressed a willingness to collaborate with responsible stakeholders. “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 concluded.

This ongoing dispute between the refinery and DAPPMAN reflects broader tensions within Nigeria’s oil sector, as stakeholders navigate the complexities of pricing, subsidies, and the nation’s economic recovery. The outcome of this standoff may have significant implications for the fuel distribution landscape in Nigeria.