Dangote, Pinnacle Oil Ink 13-Year Deal for Product Distribution Facility Amid Controversy

Dangote, Pinnacle Oil Ink 13-Year Deal for Product Distribution Facility Amid Controversy

In a surprising revelation, Pinnacle Oil & Gas Limited's Managing Director, Robert Dickerman, disclosed that his company has a existing agreement with Dangote Group to operate a product distribution terminal at the Lekki Free Zone area. This announcement comes on the heels of a recent controversy between Dangote Refinery and Pinnacle Oil over petroleum products imports and distribution.

According to Dickerman, Pinnacle Oil invested heavily in building the terminal to enhance efficiency in distributing petroleum products across Nigeria, with Dangote's cooperation, as part of a 13-year agreement. This partnership aimed to optimize distribution channels, reducing reliance on costly ship-to-ship transfers and trucking. The terminal, operational since 2021, allows full cargoes to offload in under 40 hours without delays or ship-to-ship transfers, significantly reducing costs.

Recently, Dangote Refinery accused Pinnacle Oil of importing and distributing substandard petroleum products, undermining the locally refined products. However, Dickerman clarified that Pinnacle's terminal has been operating successfully, providing a reliable and efficient distribution solution.

Dickerman emphasized the importance of a market-based solution for Nigeria's petroleum market, encouraging competition and quality supply. He noted that consumers should prioritize quality and price over supply source, whether from local refineries, imports, or other sources.

The 13-year interconnection agreement between Pinnacle Oil and Dangote Group facilitated regulatory approval for Pinnacle's project. Dangote also proposed pipeline transfer from its refinery to Pinnacle's terminal to reduce costs. Industry experts praise the Pinnacle terminal's efficiency, citing reduced costs and faster offloading times.

Dickerman stressed that Dangote Refinery would benefit from utilizing Pinnacle's distribution system to maintain market-level prices. He cautioned against recreating distribution networks that rely on single-point loading for the entire country, advocating for a more efficient and competitive market.

As Nigeria navigates its energy security and pricing challenges, this development highlights the importance of collaboration and competition in the petroleum industry. With Pinnacle's terminal operating successfully, the focus shifts to optimizing distribution channels and ensuring quality supply.

The partnership between Pinnacle Oil and Dangote Group demonstrates the potential for cooperation in Nigeria's petroleum sector. As the country moves forward, stakeholders must prioritize market-based solutions, competition, and quality supply to meet the nation's energy demands.