By Ada Samson, Abuja
In a sweeping critique that marks a significant schism within Nigeria’s downstream oil sector, billionaire businessman Femi Otedola has declared the business model underpinning the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN) obsolete.
Lauding the Dangote Refinery and President Bola Tinubu’s deregulation policy as catalysts for change, Otedola issued a clear warning to his former associates: adapt or face bankruptcy.
The commentary, penned by Otedola himself, begins with congratulations to Aliko Dangote on the refinery’s operational success, calling it a “historic leap for Nigeria’s energy independence.” However, he swiftly pivots to what he sees as the true enabler of progress: political courage.
He credits President Tinubu for having the will to execute “the full deregulation of the downstream petroleum sector,” an act he says has “broken the grip of entrenched interests and ushered in a new era of transparency, healthy competition, and customer-centric service delivery.”
This reform, Otedola argues, represents a “decisive break from the past” for a sector “long plagued by rent-seeking, subsidy fraud, product diversion, and smuggling.” Yet, he notes that “there are still voices clinging to the old ways,” setting the stage for his direct address to DAPPMAN, a group he founded over two decades ago.
Speaking from a position of deep historical knowledge, Otedola recounts founding DAPPMAN in 2002 to challenge the dominance of major marketers. “I personally structured the group,” he stated, appointing its first chairman and secretary. At that time, he acknowledged, depot ownership was strategic for “filling critical supply gaps left by an inefficient system.” But, he insists, “the times have changed.”
“Many of the original players have exited the scene, and those left are clinging to assets that no longer reflect today’s business realities,” Otedola wrote. He revealed that he had advised some members as far back as last year to “sell their depots as scrap while they still had value.” His reasoning is grounded in a stark new reality: “Nigeria now has over 4 million metric tons of storage capacity, most of it idle. With the Dangote Refinery now supplying fuel locally, the old business model is crumbling.”
He dismantled DAPPMAN’s current rationale, pointing out that the original purpose of setting up depots was “mainly to collect PFIs [Petroleum Products Importation permits]. No depots, No PFIs from NNPC who were sole suppliers of gasoline at the time.” This system, he argued, “led to the breeding of complacent importers whose sole agenda was on arbitrage and subsidy margins.” With the PFI regime gone, Otedola questioned why Dangote Refinery should be asked to subsidise DAPPMAN. “I see no reason why Dangote Refinery should subsidise DAPPMAN with N1.5 trillion which they are asking Dangote Refinery to pay and subsequently pass this cost to consumers,” he stated.
Drawing a parallel with the cement industry, where bulk carriers became obsolete after local production began, Otedola predicted the same fate awaits fuel depots built for an import economy. He urged DAPPMAN members to focus on “owning and scaling last-mile retail outlets” instead of holding on to outdated infrastructure. “If DAPPMAN members do not adapt, they will not only become irrelevant, they may go bankrupt,” he warned, suggesting they could even consortium to acquire the Port Harcourt Refinery as a true test of their capability.
Concluding with a mixture of praise and a touch of humour, Otedola saluted Dangote’s transformative impact, comparing it to Amazon Incorporated. “Aliko’s refinery is not the problem. It is the solution,” he affirmed. His final words to the billionaire were a testament to a battle hard-won: “And yes, my dear brother Aliko, you can now go to Monaco and rest jejely like me. You’ve earned it.”
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