Fuel Subsidy “Was a Scam” – Otedola Alleges Over ₦2 Trillion Fraud, Warns Depot Owners & Marketers!

Fuel Subsidy “Was a Scam” – Otedola Alleges Over ₦2 Trillion Fraud, Warns Depot Owners & Marketers!

Sele Media Africa
Reported by Marian Opeyemi Fasesan

Billionaire businessman Femi Otedola has ignited fresh controversy in Nigeria’s oil & gas sector with claims that the fuel subsidy regime under former President Goodluck Jonathan was abused to facilitate massive fraud. He also used the moment to caution depot owners and petrol marketers that the landscape of fuel supply is changing — and those who fail to adapt risk being left behind.

What Otedola Is Claiming

1. Fraudulent Claims Through Depot Licences

• Otedola alleges that over ₦2 trillion was siphoned through questionable fuel subsidy claims under Jonathan’s administration. These claims, he says, were tied to depot licences. [1]
• He stated that the policy was built in such a way that depot owners — particularly members of DAPPMAN (Depot and Petroleum Products Marketers Association of Nigeria) — became primary beneficiaries of a system that rewarded rent‑seeking, lacking transparency or innovation. [2]
• Otedola has been blunt: those holding onto depots built for previous models of fuel importation should either sell them as scrap, restructure, or invest in new segments of the supply value chain — especially in last‑mile retail operations. [3]
• He warned that clinging to old practices (such as claims for subsidy using depot licences, or expecting protection under older models) could lead to irrelevance or outright bankruptcy. [3] Pushback & Industry Reaction
• DAPPMAN has pushed back, arguing that depot owners remain essential for storage, distribution, and bridging gaps in Nigeria’s infrastructure, especially given geographic spread and logistical challenges. [4]
• Emmanuel Iheanacho, Chairman of Integrated Oil & Gas Ltd., said that depots are critical parts of the fuel chain and cannot be simply discarded. He argues that they complement refineries and filling stations, particularly for reaching remote or less‑served areas. [4] Implications & What This Means
• Policy Shift: Otedola’s allegations reinforce the rationale for the government’s deregulation and reforms. If much of subsidy abuse was enabled via depot licences and import‑dependence, then the new era of refining and local supply (Dangote Refinery) may reduce these vulnerabilities.
• Transparency & Accountability: The claims call for stronger audit, oversight, and regulation of subsidy schemes, especially historical ones. They also suggest that depot licensees should face more scrutiny.
• Economic Reality for Stakeholders: Depot owners may need to re‑evaluate their business models. If depots are idle or under‑utilized, continuing to maintain them could become costly rather than profitable.
• Consumer Impact: If subsidy fraud is reduced, and fuel supply becomes more reliable, it might lead to more stable pricing. But there are also risks: costs of restructuring or maintaining distribution could reflect in fuel prices unless carefully managed.

1. Employment Myths & Outdated Infrastructure

• According to Otedola, the typical depot employs very few people — perhaps five, including the gate‑keeper. In contrast, filling stations (gas stations) employ many more people: attendants, cashiers, security personnel, cleaners, etc. He used this comparison to argue that depots do not contribute as much to job creation as is often claimed. [1]
• He also pointed out that Nigeria now has over 4 million metric tons of storage capacity in depots, much of which he says is idle. These, he argues, are relics of a fuel import‑dependent economy. With Dangote Refinery now operational and producing locally, many of these depots are becoming economically obsolete. [1]

1. Support for Deregulation & Praise for Dangote Refinery

• Otedola commended President Bola Tinubu for pursuing full deregulation of downstream petroleum. He described this reform and the operationalization of Dangote Refinery as a “historic leap” toward Nigeria’s energy independence. [3]
• He claims these changes (refinery production, deregulation, transparent operations) are dismantling what he terms subsidy fraud, product diversion, and smuggling. [3]

Citations:

1. Nigerian News Today: www.nigerianeye.com/2025/09/n2trn-siphoned-through-questionable.html?utm_source=chatgpt.com
2. Daily Trust: dailytrust.com/otedola-how-oil-marketers-used-depot-licences-to-siphon-n2trn-under-jonathan?utm_source=chatgpt.com
3. Billionaires Daily News: www.billionaires.africa/2025/09/22/nigerian-billionaire-femi-otedola-dangote-refinery-fuel-supply-warning/?utm_source=chatgpt.com
4. ThisDay Live: www.thisdaylive.com/2024/09/04/marketer-faults-otedolas-call-on-depot-owners-to-sell-facilities-as-scrap/?utm_source=chatgpt.com

About The Author

Marian Opeyemi Fasesan

author

Marian Opeyemi Fasesan is a dynamic journalist and editorial leader committed to excellence in news reporting and storytelling. As the Managing Editor of Sele Media Africa, she ensures daily operations run smoothly while upholding the highest editorial standards. With a strong eye for detail and deep understanding of audience engagement, Marian coordinates content across platforms, guiding teams to produce compelling, timely, and credible news. Her leadership reflects the heart of Sele Media Africa’s mission—to inform, inspire, and elevate voices across the continent.

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