By Uche Usim and Adewale Sanyaolu
To tackle challenges around petrol supply disruptions in Nigeria, the management of Pinnacle Oil and Gas FZE, yesterday, advised that Dangote Refinery allows a working pipeline products interconnection and terminals near large demand areas in order to keep prices at market levels.
The Managing Director of the oil firm, Mr. Robert Dickerman, stated this while addressing misconceptions raised by Dangote Refinery, which had alleged the company’s involvement in the blending and distribution of substandard petroleum products.
He also pointed out that this strategy would help the entire industry avert price fluctuations.
He clarified that there was no intention or necessity to establish a distribution network where every truck is required to load from a single point for the entire nation.
Dickerman disclosed further that the Nigerian system of distribution could be more efficient with such structure in place.
He also revealed that the company has a 13-year pipeline agreement with Dangote Refinery.
He explained that, in a bid to improve distribution efficiency, the company proposed and invested in pipelines to transport petroleum products from the Dangote Refinery.
This method, he noted, is significantly more economical than distributing via ship or trucking across the country.
“When we proposed this project to Dangote, they wholeheartedly agreed and signed a 13-year interconnection agreement with us. In addition, Dangote facilitated our process of achieving regulatory approval by writing two Letters of No Objection to the regulator to enable our project to proceed”, he stated.
The Pinnacle CEO expressed disappointment and deep concern over the press release issued by Dangote Refinery on November 5, highlighting that it contained several defamatory, inaccurate and intentionally misleading statements.
The firm expressed concern that Dangote Refinery’s press release promoted a national policy that could inflict severe economic harm on Nigerians, driving up petrol prices beyond global market levels and exceeding current costs.
He added that, it is Pinnacle’s firm position, as well as the position of any educated economist or market watcher, that the optimal solution to Nigeria’s energy insecurity and pricing is a market-based solution that encourages all sources of supply, be they from local refineries, imports or any other source.
“These suppliers must adhere to the strict specifications of the market and product must be handled safely. But the consumer should be indifferent to the source of supply, as long as the product is good quality, and the price is the lowest attainable. This solution demands competition.”
He further explained that the sector in Nigeria employs over 100,000 people, who manage vessels serving every operational port, run storage terminals, drive trucks to fueling stations, operate retail outlets, and deliver customer service.
“Pinnacle Oil & Gas built a revolutionary terminal in the Lekki Free Zone at great expense for the benefit of far greater efficiency in the distribution of petroleum products throughout Nigeria. Prior to the Pinnacle terminal, all imported cargo had to be transferred to smaller vessels due to the shallow draft restrictions across Nigerian ports.
“This extra vessel charter, along with the associated costs of delay, has been inflating the delivered cost for many years. “With the Pinnacle terminal, full cargoes can offload in less than 40 hours and sail away without any ship-to-ship transfer or delays. This has been working extremely well for the country since operations began in 2021.
“It is Pinnacle’s firm position, as well as the position of any educated economist or market watcher, that the optimal solution to Nigeria’s energy security and pricing is a market-based solution that encourages all sources of supply, be they from local refineries, imports or any other source.
“These suppliers must adhere to the strict specifications of the market and product must be handled safely. But the consumer should be indifferent to the source of supply, as long as the product is good quality,and the price is the lowest attainable. This solution demands competition,’’
He maintained that Pinnacle Oil had earlier made it clear that imports do not equate to substandard or off-spec products, adding that there is no reason to believe that products refined in other countries would be of any lower quality than those refined here.
He assured that the regulator and all market participants work in tandem to ensure that no substandard product is ever delivered to customers.