Downstream Operators Urged to Diversify As Nigeria Plans to Exit Fuel Import

Following plans by the Nigerian National Petroleum Corporation (NNPC), to stop the importation of petroleum products in the next medium term, operators in the downstream sector, who do not diversify along the value chain, may lose out on business as they may not have a role to play in the market.

 The Managing Director, Pipelines and Product Marketing Company (PPMC), a subsidiary of NNPC, Umar Ajiya, said this during the inauguration of the flagship mega retail outlet of Emadeb Energy Services Limited, a player in the downstream oil sector in Lagos.

 Ajiya, who noted that integrating from upstream to downstream sector should be the key desire of any entity, commended the oil firm for retooling in the right direction.

 "It is all about diversification, and that is what really should drive businesses not just having a little piece of the value chain, but integrating from upstream to downstream is what should be the desire of any entity. Perhaps one day you will see Emadeb also going upstream."

 In his keynote address, a former Executive Secretary, Petroleum Products Pricing Regulatory Agency (PPPRA), Reginald Stanley, who described filing station business like a real estate business, advised oil marketers to ensure zero tolerance to fraud by imbibing integrity as a watchword. He recalled how he was opposed by oil majors that dominated the downstream in the 1980s, when he tried to champion the entry of independent marketing companies in the distribution of petroleum products in the NNPC.

 Giving an insight into the birth of the state-of-the-art mega filing station, the Managing Director, Emadeb Retail, Olugbesoye Olujimi, said: "Seeing the massive gap in the retail outlet, we felt we needed to do something differently.

 This is to have a mega station that can service a lot of motorists at the same time and at the same time cater for the needs of the people, which is what has taken us to the lubes; we want it in such a way that it's a one stop location.

 "Emadeb Energy Services has been almost a decade, we study the market, and we see what is necessary, and we try to meet the need of our customers. That is what gave birth to the retail arm of the business with depot storage for petroleum products at Ijegun. When we saw the need to bring the products to the people, we started branching out to the retail outlet, which is the easiest way to meet your customers one on one," she said.

 Olujimi revealed that they have set a target to acquire and brand 10 more filing stations in the next two years, adding that the future of Emadeb is to go into more branding of stations including partnering with other independent marketers for a wider reach.

 Regarding the numerous fuel stations operating along the same route, which in turn increases competition in the area, Olujimi said: "Ours is to do things differently, we are not just here to sell fuel, but what we want to do here is to keep integrity intact. There's transparency, nobody tampers with the meter before it is checked, and whatever you pay for is what you get. In that way, you are encouraged to come back. We are not just here to sell fuel, but we are here to have a niche."