Yesterday, Nigerian billionaire entrepreneur Mr. Femi Otedola entered the ongoing dispute over fuel supply between the Dangote Refinery and the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), urging the group to embrace innovation or face obsolescence.
Having closely observed the recent tensions between the two parties, Otedola felt compelled to share his insights, particularly regarding the implications for Nigeria’s future energy landscape.
In a detailed statement addressing challenges within the downstream oil and gas sector, Otedola commended Aliko Dangote for the remarkable achievements since the refinery’s launch, hailing it as a monumental stride toward Nigeria’s energy autonomy and economic progress.
He highlighted that despite persistent resistance from entrenched interest groups opposed to change, history demonstrates that transformation can be delayed but never permanently blocked.
Reflecting on the past, Otedola recounted founding DAPPMAN in 2002 with the goal of disrupting the dominance of major marketers and providing independent depot owners with equitable opportunities to flourish.
At that time, the association sought to address critical supply deficiencies caused by inefficiencies in the downstream sector. However, Otedola emphasized that the landscape has evolved significantly, with many original stakeholders exiting and remaining players holding onto assets that no longer align with current market realities.
“Change is inevitable. When I established DAPPMAN 23 years ago, the focus was on challenging monopolistic practices and supporting independent depot owners. I personally structured the organization, appointing the late George Enenmoh as Chairman, while I served as Vice Chairman and Sayyu Dantata as Secretary. Back then, depot ownership was a strategic necessity to fill supply voids left by an inefficient system,” he explained.
“Today, many of those early players have left the industry, and those who remain are clinging to outdated infrastructure. I advised some to divest their depots last year while they still held value. Nigeria now boasts over 4 million metric tons of storage capacity, much of which remains underutilized. With the Dangote Refinery supplying fuel domestically, the traditional business model is rapidly becoming obsolete.”
Otedola cited Zenon Oil as a pioneer in Nigeria’s diesel market, which grew by building depots to store imported fuel in a market heavily reliant on imports and plagued by inefficiencies. However, with the Dangote Refinery’s operational status, those supply gaps have effectively closed.
“We now enjoy efficient, reliable, and proudly Nigerian fuel production and distribution. Additionally, the refinery’s operations have alleviated the notorious traffic congestion around Ibafon, Tincan, and Apapa, which has long hindered logistics,” he added.
Beyond fuel production, Otedola praised Aliko Dangote for revolutionizing the entire supply chain by investing in 8,000 new eco-friendly CNG trucks to distribute fuel nationwide, reducing pollution and mechanical failures compared to the aging fleet still used by some operators.
Drawing from his extensive experience-having been a leading figure in the industry and honored as life patron of the Petroleum Tanker Drivers union in 2005-Otedola asserted, “The industry dynamics have shifted dramatically.”
He questioned the current objectives of DAPPMAN, suggesting that their fight to preserve a fuel import-dependent model riddled with subsidies and outdated infrastructure is increasingly untenable. Historically, depots were established primarily to secure Pro Forma Invoices (PFIs) from NNPC, which monopolized gasoline supply, fostering complacency among importers focused on arbitrage and subsidy margins.
With PFIs now obsolete, Otedola argued there is no justification for the Dangote Refinery to bear a N1.5 trillion subsidy burden demanded by DAPPMAN, which would ultimately be passed on to consumers.
He lauded Aliko Dangote’s bold leadership in transforming the downstream sector, likening his impact to that of Amazon in revolutionizing retail. Otedola also debunked the misconception that depots are significant employment generators, noting that a typical depot employs only a handful of staff, whereas a single filling station supports dozens of jobs across various roles.
“DAPPMAN members should pivot towards owning and expanding retail fuel outlets rather than clinging to storage tanks designed for an import-driven economy that no longer exists,” he advised.
Looking at global parallels, Otedola pointed out that major depot hubs in cities like Rotterdam or Houston primarily serve export markets, especially Africa. With Nigeria now refining domestically, such infrastructure is becoming redundant.
He drew an analogy to the cement industry, where the advent of local production led to the retirement and scrapping of bulk carriers that once dominated imports-a similar fate awaits fuel depots if they fail to adapt.
Otedola warned that without embracing change, DAPPMAN members risk irrelevance and potential bankruptcy. He encouraged them to consider divesting, restructuring, or investing in emerging value chains. For those committed to competition, he suggested collaborating to acquire and revitalize the Port Harcourt Refinery, challenging the status quo where NNPC has struggled.
He noted that even in mature markets, refinery operators are downsizing depot operations, repurposing facilities as bonded warehouses, or exiting entirely. He cited the Folawiyo Group as an example of strategic foresight, having sold its depot early and exited the sector.
“DAPPMAN once played a vital role, but its influence is waning. It’s time to abandon outdated privileges and embrace a future centered on self-reliance, transparency, and sustainable growth. Aliko Dangote’s refinery is not the problem-it is the solution. We must move forward,” Otedola concluded.
Importantly, he credited President Bola Tinubu for demonstrating the political will to fully deregulate the downstream petroleum sector, a feat previous leaders could not accomplish.
This reform, Otedola explained, dismantled entrenched monopolies and ushered in an era of transparency, healthy competition, and customer-focused service delivery.
“For too long, the sector was plagued by rent-seeking, subsidy fraud, product diversion, and smuggling. This reform marks a decisive break from that past and lays the groundwork for a more efficient and accountable energy market. Yet, some still resist change, clinging to obsolete practices despite the clear shift in tides,” he observed.
Otedola also revealed that during the Goodluck Jonathan administration, over N2 trillion was lost to dubious fuel subsidy claims linked to depot licenses. He recounted warning the former president about corrupt oil marketers exploiting the system.
“The subsidy framework was designed to benefit depot owners, with DAPPMAN members as primary beneficiaries. It fostered corruption and rent-seeking rather than transparency and innovation,” he stated.
On a lighter note, Otedola expressed pride in Dangote’s accomplishments, telling his “brother Aliko” that he has earned the right to enjoy the fruits of his labor, even joking that he can now relax in Monaco just as he does.
