Pinnacle Oil & Gas Ltd has stated that Dangote Refinery’s allegations of citing a company that blends substandard petroleum products as defamatory, inaccurate, and intentionally misleading.
According to the company, Nigeria’s perennial energy security challenges can be effectively addressed by adopting a hybrid approach that combines supply from local refineries with strategic imports from other sources.
Speaking to journalists on Thursday in Lagos, the Managing Director/Chief Executive Officer of Pinnacle Oil & Gas Ltd, Mr. Robert Dickerman, debunked the allegation of blending substandard petroleum products by the company.
The press statement from Pinnacle reads, “On November 5, Dangote issued a press release titled, ‘Pinnacle Oil and Gas FZE: Our Stand.’ Upon our review of this release, we found it to be replete with inaccuracies and gaps.”
He said that all persons knowledgeable about the Nigerian oil industry knew that there are clear standards for petroleum products, whether imported or locally refined, and that there are eminently qualified regulators charged with the responsibility of enforcing these standards.
He further clarified the issue surrounding the importation of petroleum products, saying that imports did not equate to substandard or off-spec products.
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According to him, there is no reason to believe that products refined in other countries would be of any lower quality than those refined here, pointing out that the regulator and all market participants work in tandem to ensure that no substandard product is delivered to customers.
He said it was true that Pinnacle Oil & Gas built a revolutionary terminal in Lekki Free Zone at great expense, benefiting far greater efficiency in the distribution of petroleum products throughout Nigeria.
Prior to the terminal, he explained that all imported cargo had to be transferred to smaller vessels due to the shallow draft restrictions across Nigerian ports.
This extra vessel charter, along with the associated costs of delay, he said, had been inflating the delivered cost for many years.
“With the Pinnacle terminal, full cargoes can offload in less than 40 hours and sail away without any ship-to-ship transfer or delays.
“This has been working extremely well for the country since operations began in 2021,” the CEO said.
In an effort to further enhance distribution efficiency, he said the company’s management proposed and invested in pipelines to distribute petroleum products from the Dangote Refinery, “as pipeline transfer is far less costly than distribution by ship or trucking across the country.”
For the project, he explained that Dangote wholeheartedly agreed and signed a 13-year interconnection agreement with Pinnacle.
“In addition, Dangote facilitated our process of achieving regulatory approval by writing two Letters of No Objection to the regulator to enable our project to proceed.
“It is Pinnacle’s firm position, as well as the position of any educated economist or market watcher, that the optimal solution to Nigeria’s energy security and pricing is a market-based solution that encourages all sources of supply, whether from local refineries, imports, or any other source.
“These suppliers must adhere to the strict specifications of the market, and products must be handled safely. But the consumer should be indifferent to the source of supply, as long as the product is of good quality and the price is the lowest attainable. This solution demands competition,” he said.
He emphasized that Nigeria’s distribution system could be more efficient, with working product pipelines and terminals near large demand areas.
“But given the infrastructure we have, it works quite well.
There are well over 100,000 people working in this sector in Nigeria, operating vessels to every working port, operating storage terminals, driving trucks to filling stations, operating retail stations, and providing customer service,” he added.
“Dangote Refinery would be well advised to utilize this system and help keep prices at market levels so the entire industry can avoid supply disruptions and price shocks.
“There is no need or desire to re-create the distribution network where every truck must load at one point for the entire country,” he added.
He pointed out that with all options for sales and distribution, Dangote Refinery would find it simple to compete at market pricing and make a healthy return for its investors.
“This will encourage further investment in refining, storage, and distribution to make Nigeria an efficient global trading hub and an example for other markets around the world,” he said.
Dangote Refinery had alleged that Pinnacle Oil and Gas Limited had sited a company blending substandard petroleum products next to it, urging the company to understand that deregulation of the downstream sector is not a justification for the importation of off-spec petroleum products that undermine Nigeria’s national interests.
NIGERIAN TRIBUNE
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