Independent Petroleum Marketers Association of Nigeria, IPMAN, is nearing crucial discussions with Dangote Petroleum Refinery to finalize agreements on cost and lifting of petrol from the state-of-the-art plant.
Sources close to the matter have revealed that Dangote Petroleum Refinery has asked the Petroleum Retail Outlet Owners Association of Nigeria (PETROAN) to resubmit its request for petrol lifting.
PETROAN is optimistic that petrol prices will decrease in the coming days as competition intensifies within the downstream oil sector, particularly with marketers loading petrol directly from the Dangote refinery.
IPMAN has hailed the planned agreement with Dangote Refinery as a major step towards streamlining the lifting of petroleum products, ultimately bolstering the stability and efficiency of Nigeria’s fuel supply chain.
This development comes in response to the Federal Government’s recent decision to allow petroleum marketers to lift petrol directly from local refineries without involving the Nigerian National Petroleum Company Limited (NNPC).
Wale Edun, Minister of Finance and Chairman of the Naira-Crude Sale Implementation Committee, emphasized the shift, stating, “Moving forward, petroleum product marketers are now able to purchase PMS (petrol) directly from local refineries without the intermediary role of NNPC. Marketers are encouraged to initiate direct purchases from refineries on mutually negotiated commercial terms, which will promote competition and improve market efficiency.”
Chinedu Ukadike, IPMAN’s National Publicity Secretary, expressed the association’s eagerness to engage with Dangote refinery officials.
He stated that IPMAN is ready to establish a healthy business relationship with the refinery, having acquired tank farms to bolster storage capacity and address operational challenges.
IPMAN is eager to negotiate a price and begin off-taking products from Dangote Refinery, with Ukadike noting, “We have all it takes to off-take whatever Dangote will give to us. I don’t know why they are dragging their legs to discuss with marketers, maybe it is politics. The more we take action in terms of distribution lines, the price will come down, we are not afraid of this competition, we have organized ourselves and are ready to compete because this is the survival of the fittest.”
Speaking on the issue of tank farms, he said, “The issue of not having tank farms is gone because we have addressed the issue and now have farm tanks and anywhere Dangote says they will give us our products, we will distribute them to our marketers.”
Billy Gillis-Harry, President of PETROAN, revealed that his group had been asked to resubmit their request to lift petrol from the plant.
Gillis-Harry expressed optimism that PETROAN members would soon start lifting products from the Dangote refinery, stating, “We have written to them (Dangote) several times and they are fully aware of what PETROAN has been doing. One of the executive directors there called me to say that they are going to set up a meeting with us, so we are waiting for that to happen. Hopefully, we can do that this week.” He emphasized that PETROAN is willing to take products from all available sources, including NNPC, traders, importers, Dangote refinery, modular refineries, and others.
Gillis-Harry believes that with more supplies available, petrol prices may decrease, stating, “The price can be knocked down to N700/litre; it depends on the volatility of the market and this does not always mean upward prices, it could also mean prices coming down. If we have massive supply and there is a lot of products in Nigeria, obviously everybody will be looking for just minimal profit. Our business is focused on turnover, so people may cut prices down.” He added that if PETROAN members have access to the same products and prices as NNPC, they may be able to sell at a lower price.
Meanwhile, the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has issued a bulk purchase license for independent marketers to off-take from Dangote refinery, allowing them to import products at a lower cost.
Ukadike noted that the NMDPRA chief has promised to issue an import license by Friday, providing a major boost to the deregulation process. He expressed his concern over the debt owed to oil dealers by the NNPC, which is locking up funds, causing bank charges and other expenses to be incurred.
Ukadike also emphasized the need for an energy bank to support marketers in financing their operations, stating that the current high interest rates are exacerbating price increases. He expressed his confidence that the planned agreement with Dangote Refinery would be beneficial for the industry and the country as a whole.
He further highlighted the challenges faced by independent marketers, including the need to ensure products are not stolen and adulterated, as well as the high costs of financing and operating their business.
Ukadike emphasized the need for a fair and competitive market, where all stakeholders are treated equally, stating that the current system favors NNPC and its sources, allowing them to breach the rules and regulations.
The new agreement with Dangote Refinery is expected to lead to a more competitive market, where all stakeholders can operate on a level playing field.
