The Independent Petroleum Marketers Association of Nigeria (IPMAN) is gearing up for key negotiations with the Dangote Petroleum Refinery this week, aiming to finalize agreements on the pricing and lifting of petrol from the refinery. The discussions, scheduled for Tuesday and Wednesday, will cover critical aspects of fuel distribution, which will significantly influence Nigeria’s downstream oil sector.
It was reported that the Petroleum Retail Outlet Owners Association of Nigeria (PETROAN) had been requested by the $20bn Lekki-based refinery to resend its request for petrol lifting, signaling a positive step towards collaboration.
PETROAN expressed optimism that petrol prices might decrease in the coming days, as competition within the sector intensifies, allowing marketers to directly source products from Dangote’s refinery.
IPMAN’s Strategic Talks with Dangote Refinery
IPMAN emphasized that these talks with Dangote are crucial to securing favorable terms for the lifting of petroleum products, ensuring the smooth distribution of fuel across Nigeria. The discussions are part of broader efforts to stabilize the country’s fuel supply chain.
This development comes shortly after the Federal Government granted petroleum marketers the right to lift petrol directly from the Dangote Refinery, bypassing the intermediary role of the Nigerian National Petroleum Company Limited (NNPC).
Wale Edun, the Minister of Finance and Chairman of the Naira-Crude Sale Implementation Committee, confirmed the new directive. He stated, “Marketers can now initiate direct purchases from refineries on mutually agreed commercial terms, promoting competition and enhancing market efficiency.”
IPMAN’s Readiness and Tank Farm Acquisition
IPMAN’s National Publicity Secretary, Chinedu Ukadike, provided an update on Sunday, expressing optimism about the upcoming negotiations with Dangote Refinery. Ukadike explained that IPMAN has made significant improvements in its infrastructure, including the acquisition of tank farms to bolster fuel storage capabilities.
“We hope to sit down with Dangote maybe Tuesday or Wednesday. If they provide a pricing template, we will proceed immediately. We now have the capacity to handle any quantity Dangote supplies. Ukadike said during an interview on Arise TV, “We have resolved the issue of tank farm shortages.”
PETROAN’s Positive Outlook
PETROAN’s president, Billy Gillis-Harry, also confirmed that discussions with the refinery are underway, adding that members of PETROAN are eager to lift petrol from multiple sources, including Dangote, NNPC, and modular refineries.
“We are willing to take products from all of them. We have been asked to resend our request to Dangote, and we’ve done that and are hopeful that a meeting will be set soon, and members should begin lifting from the refinery shortly,” Gillis-Harry stated.
Impact on Petrol Prices and Competition
Both IPMAN and PETROAN believe that increased competition in the fuel market will drive prices down. while Gillis-Harry noted that with a stable and substantial supply, petrol prices could potentially drop to as low as ₦700 per litre.
“If we have an influx of supply, everyone will be focused on minimal profits. Our business thrives on turnover, and this could bring prices down,” he added.
Ukadike also pointed out that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) had issued a bulk purchase license for independent marketers, allowing them to offtake products directly from Dangote Refinery.
“The NMDPRA has issued a bulk purchase license for us to lift from Dangote. We expect this to start immediately, and they promised us an import license as well. The implementation of deregulation must put all stakeholders on equal footing to promote healthy competition.”
Financing Challenges and Future Outlook
However, Ukadike raised concerns about the financial strain independent marketers face, especially with rising interest rates. Although, He called for the establishment of an energy bank to support marketers and alleviate the financial burden.
Also “Before subsidy removal, a truck of 45,000 litres cost us ₦8.1m, but now it’s close to ₦50m. It’s becoming unsustainable for many,” Ukadike explained.
Furthermore, He also stressed the importance of working with security agencies to prevent fuel theft and adulteration, ensuring that products reach their intended destinations without issue.
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