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‘Price regulation is killing competition in Nigeria’s downstream sector’

From chasing companies with proposals for websites designing 13 years ago to becoming one of Oyo’s accomplished entrepreneurs with statement investments in the marketing of oil and gas products, Wale Salmon Oladiti, Wheeldrop Petroleum chief executive officer, is on a journey to claim more territories in the saturated petroleum product market. In this interview with Temitayo Ayetoto, Oladiti speaks on his journey so far, how deregulation will impact Nigeria’s oil sector and plans to add to expand his outlets to Lagos, Osun and Ogun States.

 Could you take us through your journey so far? How did you get to where you are now?

I studied Computer Science at the University of Abuja and graduated in 2007. Back then, I had a conversation with a friend who asked about my plan after school. That was the question that actually gave me a sense of direction, although I was quick to respond since I was studying Computer Science and already into online application and website designing. So, it didn’t take me time to tell her I wanted to be a website developer.

Thereafter, she saw an advert for a three-day seminar on website development, I didn’t have any money apart from my pocket money, N7,000, but she encouraged me to attend that training which cost me about N20,000. While I was observing students’ industrial work experience scheme (SIWES) again, my father encouraged me to go for further training at Ibadan instead of searching for a job immediately.

While doing that, I was already writing proposals. Basically, I’ve always been a business-oriented person and all I was looking for was an opportunity to launch. I kept writing proposals to different places in Abuja and when I came back home to Ibadan, I was doing the same even though nothing serious was coming forth then. After graduation, I kept going around to sell the website ideas and one day I stopped at my dad’s office sweating profusely. He wondered where I was coming from. Being a hardworking person, he was impressed that I was turning out to be like him. I explained my business to him and he approved. At a point he asked what I wanted to do and I asked him to help me with three things. One was that he should give me a laptop, an office and a car. But my father, for who we have always known him to be, gave me a laptop, an office and asked me to go and work with it to buy myself a car. He is a unionist and so one day, they were having their meeting and the idea of having their own website came up and my dad was like, I have a son that is into this. They asked me to come up with a proposal. But being a person that doesn’t joke with his integrity, my father begged me: ‘please don’t do anything that will tarnish my image. Give them a very good job and don’t overcharge them’.

After I developed the Union’s website, a lot of them gave me personal jobs and I made some more money. At that point, I told myself that the money may not continue coming the way it did and I needed to think long term. I was already eyeing my dad’s business then.

I gathered money and bought a truck. He asked me to start working with him too. There were some accidented tanks they were going to dispose but someone thought of me and asked if I could repair it. I fixed one of them and that was how I owned a truck then and started working for Total. Later on, I met my wife who was a banker and still a banker. At some point, the truck looked so rough and the management didn’t want it in their system. We had to remove it, sell it and my wife helped me raise N700,000 which I augmented to buy another truck. I bought the second and the third. My truck was working under my dad’s company. After some time, I designed my own company and started operating with it. That was in 2002. That was how Wheeldrop was birthed.

Wale Salmon Oladiti

I got an offer to lease a station along Ojo, Ibadan. It was just two pumps station, very small. I started a retail business in the filling station.  I was able to take another one on lease and the stations were doing fine. One was selling 500 litres per day and the second was selling 1,000 litres per day. But before I left, the one selling 500 was already selling 7,000 litres. The second that was selling 1,000 litres increased to over 5,000. Today, I have met a lot of bigwigs in the industry who say they like my brand.

 How have you steered the company’s wheel since then?

I learnt a lot from my father. Integrity is the key to success. I have a friend, Taiwo Shittu, son of the owner of Lanre Shittu Motors. When I took the first station on lease, I didn’t even have money. It was someone very close to my dad that lent me money. After getting the station, there was no money to buy the product. I told my friend Taiwo, who urged me not to worry, that he has a cousin who is into oil and gas. I also bought trucks from him too. He spoke to his cousin and the cousin agreed to supply on the condition that there would be collateral. The response Taiwo gave him was that the whole of Lanre Shittu would stand as a collateral. Wale is someone you can trust. I started getting the product. After selling, I returned the money and got another one. That was how I was going about it until I was able to raise capital for the station.

My dad has a policy, that the moment he can’t sell at the control price, he will lock the station up because he wouldn’t sell at high prices to people and I borrowed that from him. So, there was this particular scarcity that had other marketers selling above regular price and I was selling at normal price. People were so happy and after the scarcity, I was able to retain them as my customers. I saw that people really appreciated it. From there I started selling at N142 and the acceptability was great. I ensure my measurement is always intact and don’t manipulate. When I saw the response, it was encouraging. So, when we built this place three years ago, apart from branding, we started selling at N140. I was buying N138 and still retained N140. People were surprised and even brought their measurement to confirm that the metre was very okay and they were even pressuring me to increase the price. But I refused to tamper with my measurement.

 How have you fared under the oil pricing regulation in marketing your product?

Every government policy in a way will always have effect, positive or negative. Before the present administration, we experienced scarcity here and there. But if you look at kerosene today, it’s deregulated. If you look at diesel today, it is deregulated and there is no crisis. You go to the depot, buy and sell, even though international prices determine what you sell. So as far as I’m concerned, the best we can have is for government to deregulate. When there is no government hand in it, then we will all know we are operating in a reality.

 What are the constraints you face doing business as a result of persisting regulation?

I was in Lagos recently and was talking to one of the bigwigs in the business and he was referring to another marketer selling below N145, as operating with unsustainable model. Every company has its own business model and you won’t just wake up and say you want to do this. You must have done your feasibility study. But generally, we need the government to hands-off business. For instance, in transportation, majorly the product should go through pipeline to various parts of the country from the depot, but we have trucks doing all these things and what government pays the transporters compared to what others in the same line of business get is poor. We have some haulage companies where if you go from Lagos to the far north with the same size of the goods, some pay N1 million while we get N500,000 or thereabouts. But when the government removes its hands, you can sell what you like and the people that will take the product too can choose what they want. At the end of the day, when the government said we should be selling N145 per litre, is it everybody that is complying? When I wanted to inaugurate one of my new outlets, the moment they saw my logo, everyone changed their price to N140 because of competition. That is the beauty of deregulation. Dangote is coming up, which will make it a lot easier. By the time he starts now, we will just go to Lagos and buy and the rest will be exported.


 How is Wheeldrop impacting economic development in Oyo?

It is in so many ways. At least my staff strength now is about 170.  All my stations sell N140 per litre, leaving a difference of N5 on every litre that people buy. We pay tax to the state and the federal government. And don’t forget that each time we build these stations, we have a lot of people who work, make money and go. The 170 are permanent core staff, excluding other temporary staff.

 What’s your plan for expansion?

In the last three years, people barely knew the name Wheeldrop. But today in Ibadan, if you count the first four, you will include Wheeldrop. And in the nearest future, we want everyone in the nook and cranny of Nigeria to enjoy what our customers are enjoying today. We want to expand to Lagos, Ogun and Osun states. Lagos is of priority. Lagosians should also enjoy it. I just commissioned an outlet and I realise that I need to go back to my drawing board and come up with more ideas. I’m not going to do anything until we are able to come up with some fresh ideas.

 Are you thinking about franchise?

There is one thing about franchise which is the ability for those that obtain to maintain the standard and principles you set. There are some marketers that were doing well before they started spreading to different places using a franchise, but their standard fell afterwards. But I think with the aid of technology, it can work better. I first want to have a solution. I know the problem. Here we have so many proposals from different oil marketers that we should come and take over their outlets. We are still doing location study because it is very important. It entails a lot. We are trying to see how we can make use of technology for proper monitoring of our outlets. We are talking to different information technology (IT) companies already.

 The minister of state for petroleum resources, Timpre Sylva, said the Federal Government will deepen the implementation of the Nigerian Oil and Gas Industry Content Development (NOGICD) Act as a strategy to lower Nigeria’s high crude oil production cost. What are your views on it and how much role will it play in the local content drive?

Before, even the transportation sector in the downstream was majorly operated by foreigners. But today, we have Nigerians doing it. If it can be implemented, it will help in a way because it will create more opportunities for Nigerians to excel. There is nothing as beautiful as that policy. I think one of the problems is that Nigerians may not be ready for these opportunities in terms of delivering great standards. We have to be ready. It is not just enough for the government to want to do it.

 How are you improving things in your operations?

We transport for Total Nigeria plc, which is a multinational company. I’ve been to Paris and Italy basically on training, nothing more. What we try to do is to ensure all our drivers are trained and retrained for better services. One of the senators recently raised the idea of introducing tax for product spillage and people saw the video and started sharing with me, worried it will affect my business. At a point when we needed to do some certification with road safety, they said they would give us certain requirements. So, I thought it would be a new thing but when they sent out the requirements, we realised that they were just our normal standards of operating. They were things that we had already in place. Our trucks come with imported tank covers. If there is an accident and a truck falls, Total trucks will hardly have spillage because even when it’s lying on the floor it won’t spill its content. There are rules of speed that our drivers work with.

 For young entrepreneurs who want to venture into petroleum marketing, what’s your advice to them on raising funds?

Integrity is very key. I told you I met someone who gave me products to start my business many years ago and we are still doing business together until today. Then it used to be one truck which was valued at about N2 million then. Today, it’s over N4 million and if I call him that I need 20 trucks and that the money is coming at a particular time, he will release them. The point I’m making is that there are a lot of people who have money but don’t have people to trust it with it. So, integrity is very key. In this downstream sector, you can hardly find people to trust. I try to safeguard my business and I’m not overambitious. I deal with people I trust personally. For those that want to come into the business, they should take their time to study the terrain. There are a lot of things you need to put into consideration if you want to open an outlet for instance. You have your money but it’s not just enough. You have to consider the location to cite your station. You have to ask a lot of questions and find someone who has a proven record to follow the footsteps.

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