Victor Kalu is the Chairman of Vindi Petroleum Limited, a new entrant into the downstream oil and gas industry in Nigeria. In this interview with PAUL OGBUOKIRI, he says the company’s entrance into the sector is to bring efficiency in the distribution of petroleum products in the country, which is responsible for uneven prices across the country

What exactly do you mean with your company’s motto: ‘developing the largest petroleum distribution company in Africa?”
Imagine you feel that there is a problem in the food industry and you want to make a change, you want to bring solution? With N1 million, you can start a restaurant, and bring that your idea into fruition, but it is not like that in the petroleum industry.

There is scarcity and there is a problem with the way the distribution is done and you think that you want to make a change? You can’t change anything because for you to have just one petrol station, you need more than N1 billion.

So, we looked at the situation and said, ‘why not elongate the very foundation of the industry partnership?’ Right now, I know a lot of people that are handing over their filling stations to Vindi Petroleum to manage, but I won’t mention their names in the press.

So, what we are doing now is bringing in massive amounts of resources into the industry, that are led by ordinary people that do not have deep pockets, but are interested in making a change in the petroleum industry. They can come to Vindi and we will partner with them. Imagine you have 100 people that say that they want to make a change in the petroleum industry and they have N100 million each. That is a huge amount, and we can then come to a place like this (Kuja community, close to Maza-Maza in the Amuwo Odofin area of Lagos State), where there is huge demand, one of the operators here, a transport operators, told us that they can’t be able handle the demand alone.

There is huge demand. If you go out there, you will see so many Okada, Keke, trucks and luxury buses. You will see large numbers of kegs there, how they are hustling to get diesel and petrol for their vehicles, even to power their houses, they trek all the way to Alakija to get buy. This is unacceptable. We can partner with people to bring this kind of value (Vindi Petroleum Petrol Station) to the communities like this (Kuja Community), and of course, such communities are scattered all over the country.

When you make this investment in this industry, the returns will be good. Let’s put it this way. People want the oil money, but they don’t have the money to break into the industry because of the huge resources required to get in. So, we are breaking the barrier of entry and we are also breaking the barrier of poor management. The problem people are facing that makes investment go down the drain is poor management. For somebody who have about N700 million, and is afraid of losing it when he invests it in one filling station, we are saying you can bring the fund and we will we will spread it across many stations in a Hedge Fund, you don’t put all your eggs in one basket; we will hedge the fund for you across many stations, at the end of the month their returns will balance themselves.

How do you intend to bring this change to fruition, can you break it down?
In the early 2000, if you want to make a phone call, you must make one minute, anything less was counted as one minute. I bought a SIM Card for N32, 000. That was an unimaginable exploitation, but it was happening until Glo came onboard and changed the story. In Glo, I was Regional Manager, Data at that moment of change.

Today in the downstream oil industry, Nigeria is grappling with the exact thing that happened in the telecom industry at that time.

If you want to buy petrol for example in Kano, Port Harcourt, Abakaliki or Maiduguri; you will get different prices. If you want to buy in Lagos, you will get a different price. In fact, you may not even see the product to buy in those places except in Lagos, Port Harcourt and Abuja. It is an anomaly; no other industry has this kind of distorted pricing. It is also difficult for people who want to come into the industry and make a change. The entire chain is in the hands of a few.

I recall when this current scarcity started, the authorities were asked what the challenges were, since the price has gone up; and they said it is distribution. If distribution is the challenge, I am a Distribution Man. If I can distribute FMCG, if I can distribute telecom products in Nigeria, I am here again to partner with the industry to make another change.

Our model is very ambitious. Our plan is to at least have 750 Filling Stations across Nigeria in the next 12 months. Our model is straightforward and we’re also bringing innovation.

When you want get a filling station, you need hundreds of millions and if you want to acquire a station in a metropolis like Lagos, you will have to cough out at least a billion Naira, and to get the product, you have to keep at least N100 million for product per station, and you will need about three trucks to bring products to the station. Similarly, if you want to have the station in a rural area, you will need hundreds of millions of Naira. How many people can afford this kind of huge capital outlay to own stations? So, what we are doing is that we’re breaking down the franchise system in the industry; and offering the people to partner with us so that we can pull resources together, and have multiple branches as fast as possible.

We’re guaranteeing quality products, fair price and product availability. We’re also promising Nigerians that we’re going to have uniform prices across the length and breadth of Nigeria for the first time in the country.

We have already begun our partnership with the refineries in Nigeria, we have already concluded that. When we opened our platform for franchisees, we were oversubscribed. That tells you the hunger and burning desire in the hearts of Nigerians to see a change to this abnormal situation we have in the industry.

Are these partners you talked about going to come to you or you will go to them?
Everybody in the country, the rich and the poor are suffering the challenge of the hiccups created by the inefficiency in the distribution of petroleum products in the country, so if you are interested in bringing a change, you can come and partner with us. We’re going to ensure there is no monopoly. We’re bringing competition, uniform prices across the country, and fast distribution of products.

We opened a subscription platform which was oversubscribed and we have stopped any form of advertisement for now. We’re the sort of people that want to bring about a change and we’re determined to do just that.

I am coming in where I have carved a niche for myself. With my experiences in distribution in the telecom industry, FGMC, etc I have developed the capacity to distribute products in mass and across different parts of the country. I am a distribution man. As the Regional Manager Data of Glo, I distributed billions in volumes across the country. Before now I was also collecting revenue for a state government from the informal sector.

Most states find it difficult to tap from the huge revenue that is collectable from the informal sector. I commend President Tinubu because he knows the huge potentials in the informal sector. The informal sector in Nigeria today generates over N36 trillion annually and most of those revenues are not taxed and most of the people in the informal sector are not empowered. If someone is a bricklayer for example, there is no job training to enable him to improve in the job and getting credit is difficult, when he gets it, it is at a very high cost. While the big man gets credit at a lower percentage, they get the credit at times 20 per cent above what the big man got it. This is injustice; I have also been able to break into that sector.

My records are there. It is all about audacious challenges. Nigeria has so much potential and there are about 11 million cars in Nigeria today that are facing fuel scarcity, that want fuel, the food from Benue, Kebbi, Anambra and other food producing areas, are facing high cost of fuel caused by the inefficiency in distribution. We want to make the products available, accessible to consumers; rather than pass on the cost of inefficiency to them.

You heard the template released by the NNPCL that said fuel will be sold at N950/liter in Lagos, N992/liter in Abuja, and some places like Borno N1,019/liter. What we intend to do is that rather than pass those costs to the consumers, we will make our processes efficient. That is what business is all over the world.

Are you also considering partnering with Dangote Refinery which is Nigeria’s main producer of petroleum products now?
Yes, we are ready to partner with them. They’re refiners while we are distributors. They are playing their part in bringing the desired solution to the country’s energy challenges. We have our sources of supply but we are ready to work with Dangote.

If you get your product from a source that is expensive, how are you going to give the fair price you are promising? Are you going to sacrifice?
Our promise of fair prices remains constant. We know that in this journey, we will suffer at the beginning, but as we progress and volume increases, we will balance up.

How are you going to take the service to states like Borno in the North East, Katsina, Zamfara in the North Western parts of the country?
We already have sites in twenty states of the country as we speak, there a big ticket, we have the money

You talked about giving back to society, and there is the talk about 10 per cent of profit. What is your CSR plan going to be like?
I am not promising 10 per cent but we did it in revenue collection. We have a lot of projects lined up for the communities for development of our operating environment.

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