Oil and gas expert, Olabode Sowunmi, has weighed in on the growing tensions between Dangote Refinery and key downstream oil stakeholders, warning that while Dangote’s operations are valid and necessary, Nigeria’s market must not evolve into one where other businesses are edged out of existence.
His comments come amid complaints from groups such as NOGASA and PETROAN, who argue that the refinery’s plan to supply petroleum products directly to end users would disrupt existing supply chains and could lead to scarcity in the long term.
According to Sowunmi, both sides of the argument hold water. While Dangote is taking steps to ensure its survival in a competitive market, other players are understandably worried about market distortion.
“Dangote is a dominant player. It is doing its own things to survive — and it must be supported for that. But however, other businesses must not die, and the potential for other businesses must not be terminated,” he said.
He warned that while innovation and efficiency are part of business, there must be adherence to existing regulatory frameworks, particularly Nigeria’s antitrust laws under the Federal Competition and Consumer Protection Commission (FCCPC).
He said, “There’s no doubt that Dangote himself is doing whatever it is to do business the way he does know how to. However, there are rules to business.”
Referencing the historic 1911 US antitrust ruling that led to the breakup of Standard Oil, Sowunmi stressed the importance of regulation in preserving fair competition. That landmark ruling gave rise to multiple companies, including ExxonMobil and Chevron, which he said would never have existed under a monopolised system.
In the case of Dangote, the refinery currently holds a midstream license, but its plans to distribute directly to end users — including via CNG trucks — would require fresh approvals for downstream operations. This, he said, is where regulatory checks must come into play.
“In the interest of the growth of the market and the future, there has to be rules for competition,” he said.
Melissa Enoch
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