Fuel distribution : Pinnacle Oil opens up on deal with Dangote Refinery

Amid recent controversy over the distribution and import of petroleum products, Pinnacle Oil & Gas Limited has disclosed details of its agreement with Dangote Refinery, shedding light on their joint operations at Pinnacle’s distribution terminal located in the Lekki Free Zone.

Speaking on Thursday in Lagos, Pinnacle Oil’s Managing Director, Mr. Robert Dickerman, clarified that the company invested heavily to establish a state-of-the-art terminal in Lekki, aimed at significantly enhancing the efficiency of petroleum product distribution throughout Nigeria. This initiative, he noted, operates under a 13-year agreement with the Dangote Group. “We built this terminal to improve national distribution efficiency with the full cooperation of Dangote Group,” he said, questioning recent claims that the facility’s operations were intended to undermine the refinery.

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Earlier this week, Dangote Refinery alleged that Pinnacle Oil was involved in the import and distribution of substandard petroleum products, a move it claimed undermines locally refined products.

In response, Dickerman emphasized Pinnacle’s commitment to improving distribution processes: “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.”

Advocating for a competitive petroleum market, Dickerman argued, “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. Suppliers must adhere to market specifications, ensuring quality and safety, but consumers should benefit from the most competitive prices available.”

Prior to the establishment of Pinnacle’s terminal, imported fuel cargoes faced costly delays and had to be offloaded to smaller vessels due to draft restrictions at Nigerian ports, a process that added significant costs to petroleum distribution over the years.

Dickerman highlighted that since the Pinnacle terminal began operations in 2021, it has enabled full cargo offloading in under 40 hours without additional ship-to-ship transfers or delays.

He further advised, “The 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 recreate the distribution network where every truck must load at one point for the entire country.”