MUST READ: “Otedola Urges Marketers to Rethink Strategy, Prioritize Profitable Retail”

Dangote Refinery: Think before advising us, oil marketers reply Otedola

Oil marketers in Nigeria have rejected billionaire businessman Femi Otedola’s call to sell off their investments in the nation’s oil sector.

The National President of the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), Billy Gillis-Harry, described Otedola’s statement as insensitive and not properly thought out.

Meanwhile, Otedola had advised DAPPMAN members to focus on owning and scaling last-mile retail outlets rather than holding onto tanks built for a fuel import economy that no longer serves the country.  In a more thoughtful way, Mr Femi Otedola is right.

Otedola’s advice is very relevant to the current reality of the Nigerian fuel business. Let me break it down:

Shift in the market: Tanks built for a fuel import economy are long-term capital investments designed for large-scale import and storage. Nigeria is moving toward localized refining and more efficient distribution, meaning holding onto large tanks may tie up capital that could be more profitable elsewhere.

Last-mile retail is growing: Owning and scaling retail outlets—like fuel stations and convenience stores—targets the actual point of sale. This captures consumers directly and generates steady cash flow, which is more aligned with current market realities.

Capital efficiency: Retail outlets require less upfront investment compared to massive storage tanks, and they are more adaptable to market fluctuations and changes in demand.

Strategic relevance: With the government pushing for deregulation and local refining, the business model is shifting from storage/importation to distribution and retail. Focusing on last-mile infrastructure aligns with this trend.

Conclusion: Otedola’s advice is practical and aligned with current economic trends. DAPPMAN members focusing on retail outlets rather than outdated storage infrastructure could see better returns and sustainability.

They should looked into this respectively.
Regards

Source Tribune Online 

et Sam