Refinery Counters N1.5trn ‘Subsidy’ Allegation by Fuel Marketer

Dangote Petroleum Refinery has reaffirmed its stance in its ongoing dispute with the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), insisting it will not absorb logistics costs that marketers are attempting to classify as a subsidy.

The refinery stated that sales are made at its gantry based on production costs and regulated margins, with no hidden subsidies. It faulted claims by marketers that it should shoulder over ₦1.5 trillion in logistics expenses, stressing that the cost of transporting products to depots nationwide remains the responsibility of marketers.

In a statement shared on the company’s official X account on Thursday, titled “We Stand By Our Statement on DAPPMAN … Marketers’ ₦1.505trn Subsidy Demand” and signed by management, Dangote maintained that it has the right to protect its operations from misleading reports. It said aggrieved parties are free to seek redress in court.

“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. 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 said.

Reiterating that fuel subsidy was abolished by the Federal Government in May 2023, Dangote noted it has no obligation to cover marketers’ costs. “There is no subsidy in our pricing template, nor have we entered into any agreement with marketers to subsidise petroleum products. As such, we cannot be coerced into absorbing the cost of marketers’ distribution,” it said.

Highlighting its logistical capacity, the company disclosed that in the three months between June and September, it completed over 3.4 million tanker movements nationwide via road and rail infrastructure, ensuring steady supply of petroleum products.

The refinery described DAPPMAN’s claims as “wrong and misleading” but pledged to maintain energy security and affordability. “We remain committed to ensuring energy stability in Nigeria, delivering products at affordable prices, and working with stakeholders in the downstream sector towards lasting stability,” it stated.

Dangote also published a breakdown of the alleged subsidy burden, noting that the ₦1.505 trillion demanded by marketers was the total they expected the refinery to absorb to equalise prices at their depots with the gantry price in Lagos.

The dispute comes amid a strike action declared by the Nigeria Union of Petroleum and Natural Gas Workers (NUPENG) over welfare, job security, and alleged high-handed practices in the downstream sector. The industrial action temporarily disrupted distribution, raising fears of fuel scarcity and reigniting debate on the implications of deregulation and subsidy removal.