Nigeria’s billionaire businessman, Femi Otedola, has stepped into the heated standoff between the Dangote Refinery and the Depot and Petroleum Products Marketers Association of Nigeria (DAPPMAN), declaring that the association’s traditional business model has outlived its relevance in today’s petroleum market.
In a strongly worded statement, the philanthropist and energy investor called on DAPPMAN to innovate or risk bankruptcy, stressing that the age of fuel import-driven depots was gone with the emergence of local refining capacity.
From founder to critic
Otedola, who revealed that he personally founded DAPPMAN in 2002, explained that the association was initially created to break the dominance of major marketers and provide a platform for independent depot owners.
“At that time, depot ownership was strategic. We were plugging gaps in an inefficient downstream system,” he recalled, adding that he had personally structured the association’s leadership by appointing the late George Enenmoh as chairman, with Sayyu Dantata as secretary while he himself served as vice-chairman.
However, Otedola maintained that the conditions which justified depot expansion two decades ago no longer exist. With Dangote Refinery’s 650,000 barrels per day capacity supplying locally refined products, he said the import-driven depot system has become redundant.
Depots and idle capacity
Nigeria, according to Otedola, now has over 4 million metric tons of storage capacity, much of which remains idle. He argued that many depot operators have refused to adjust to current realities, still clinging to assets that no longer generate value.
“I advised some of them as far back as last year to sell their depots as scrap while they still had value,” he said. “But history shows you cannot stop change you can only delay it.”
The billionaire added that depots were originally designed to collect Pro Forma Invoices (PFIs) from the NNPC when imports dominated the sector, a model that encouraged rent-seeking, subsidy arbitrage, and inefficiencies. With no more PFIs in the deregulated market, he questioned why DAPPMAN is demanding a ₦1.5 trillion payout from Dangote Refinery, insisting it would only burden Nigerian consumers.
Dangote’s transformation of downstream
Otedola hailed Aliko Dangote’s refinery project as a “historic leap” for Nigeria’s energy independence, likening its impact to Amazon’s disruption of global commerce. Beyond refining, he noted, Dangote has invested in 8,000 new CNG-powered trucks for nationwide distribution, replacing the aging fleet that has long contributed to inefficiency and environmental concerns.
“Today, more than producing fuel, Dangote has redefined the logistics chain reducing gridlock around Apapa and cutting pollution across Nigeria,” he said.
Rethinking employment and value chains
Countering claims that depots generate massive employment, Otedola argued that a typical depot employs “perhaps five people, including the gatekeeper,” compared to filling stations that provide dozens of jobs per outlet.
“If anything, DAPPMAN members should focus on retail outlets and last-mile distribution, rather than clinging to tanks built for a fuel import economy that no longer serves us,” he maintained.
He also drew parallels with the cement industry, where bulk carriers became obsolete once Nigeria achieved local production, noting that the same fate awaits depot infrastructure in petroleum.
Deregulation and political will
While crediting Dangote’s vision, Otedola reserved special praise for President Bola Tinubu for implementing full deregulation of the downstream petroleum sector a reform he said broke the grip of entrenched cabals and dismantled the fraudulent subsidy regime.
“Up to ₦2 trillion was siphoned under past administrations through subsidy claims tied to depot licenses,” Otedola revealed, recalling how he had personally warned President Goodluck Jonathan about being misled by unscrupulous marketers.
According to him, Tinubu’s reform has ushered in transparency, efficiency, and healthy competition, effectively dismantling an era of rent-seeking, diversion, and subsidy fraud.
Call for strategic adaptation
Otedola warned that DAPPMAN risks irrelevance and bankruptcy if members continue resisting change. He suggested they explore new opportunities such as investing in filling stations, restructuring their assets, or even jointly acquiring the Port Harcourt Refinery to prove their capacity for competition.
He cited the Folawiyo Group as an example of foresight, noting how it sold its depot early and exited strategically. “That is the kind of thinking required now,” he added.
A new chapter for Nigeria’s oil industry
In closing, Otedola stressed that the future of Nigeria’s petroleum sector lies in self-sufficiency, innovation, and sustainability.
“DAPPMAN had its place, but its relevance is fading. Aliko’s refinery is not the problem it is the solution. We must stop clinging to outdated privileges and embrace this new era of efficiency and pride in our own production,” he said.
And with a touch of humour, he saluted Dangote: “Africans are proud of you, my brother. Now you can go to Monaco and rest jejely like me, you’ve earned it.”
