Following the recent controversy between Dangote Refinery and Pinnacle Oil & Gas Limited concerning petroleum product imports and distribution, it has now emerged that the two companies hold a pre-existing agreement governing the operations of Pinnacle Oil’s product distribution terminal, located in the Lekki Free Zone.
Mr Robert Dickerman, Managing Director of Pinnacle Oil, disclosed this development in Lagos on Thursday.
According to Dickerman, Pinnacle Oil has heavily invested in constructing the terminal to improve the efficiency of petroleum product distribution across Nigeria.
This project, undertaken in collaboration with Dangote Group, is backed by a 13-year interconnection agreement aimed at optimising distribution nationwide.
He expressed surprise over Dangote Refinery’s recent allegations that the terminal was designed to undermine its operations.
Earlier this week, Dangote Refinery accused Pinnacle Oil of distributing substandard petroleum products to the detriment of its domestically refined alternatives.
However, Dickerman clarified that Pinnacle Oil’s investment in pipelines, intended to facilitate petroleum product transfers from Dangote Refinery, was made to streamline national distribution.
“In our effort to further enhance distribution efficiency, we 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.
“When we proposed this project to Dangote, they wholeheartedly agreed and signed a 13-year interconnection agreement with us.
“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”.
He noted that, “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, be they 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 good quality, and the price is the lowest attainable. This solution demands competition”.
Before the Pinnacle terminal’s establishment, all imported petroleum cargo required transshipment to smaller vessels due to shallow ports, a process that industry experts say inflated costs. Now, the Pinnacle terminal allows full cargoes to unload in under 40 hours, eliminating costly delays and enhancing efficiency since operations commenced in 2021.
Emphasising the terminal’s benefits, Dickerman advised Dangote Refinery to integrate this system to help maintain competitive market prices, which would support industry-wide price stability and prevent distribution disruptions.
