This interview was conducted in 2025.
Nigeria's downstream petroleum sector depends on the network of storage and distribution infrastructure that moves products from source to station. Private depots sit at a critical node in that chain, serving as the bridge between large-scale supply and the last-mile distribution that keeps fuel stations stocked across the country.
Sabitu M. Ajadi, Terminal Manager of AIPEC Oil and Gas Limited, spoke to Petroleumprice.ng about depot operations, the impact of subsidy removal, the Petroleum Industry Act, and what the growth of local refining capacity means for private depot operators.
Can you give us a brief overview of AIPEC Oil and Gas and its role in Nigeria's downstream sector?
AIPEC Oil and Gas is a petroleum product storage depot located in Ibafon, Apapa, Lagos. We store PMS and AGO, and our truck park accommodates a minimum of 250 trucks at a time, which significantly relieves pressure on the expressway.
What are the biggest challenges depot operators face in today's market environment?
The primary challenges are price competition and foreign exchange sourcing. Those two things define the operating reality for depots right now.
How has the removal of fuel subsidies affected your operations?
Subsidy removal has actually made the market easier to trade in. We now determine our own profit margins in an open market environment, which gives operators like us more commercial flexibility than we had under the subsidy regime.
Without pipeline deliveries, how do you ensure a steady product supply?
We use our jetty facility. Products come in through importation or we load directly from refineries within Nigeria. That gives us supply options that are not dependent on pipeline infrastructure.
How have pricing dynamics from Dangote Refinery and other domestic suppliers affected your business?
There are effects, but we manage them by focusing on turnover and handling high volumes. That is what keeps the business healthy in a competitive pricing environment.
What is your position on the Petroleum Industry Act and its implications for depot operators?
The PIA has the potential to take the industry back to a pre-1999 model if the NNPC returns to pipeline distribution. However, our view is that depots have come to stay. The distribution infrastructure we provide is too critical to be displaced.
How do you engage with regulators, and what improvements would you like to see?
We comply fully with all regulatory requirements, including environmental and security standards in line with ISCP regulations. That said, we would like to see NMDPRA reduce its charges and focus on core downstream regulation. The stamping of waybills, in particular, is a process that should be eliminated. It adds no real value to the system.
What is your long-term outlook for private depots as local refining capacity grows?
Refineries will still need depots to bring products closer to end users. The distribution role we play does not disappear with increased local refining. If anything, it becomes more important. Our strategy is to position AIPEC as a key storage and distribution point for both refinery output and imported products. We are also actively monitoring the energy transition and efforts are ongoing in that direction.