Negotiations Between Independent Petroleum Marketers Association of Nigeria and Dangote Refinery Set for This Week
The Independent Petroleum Marketers Association of Nigeria (IPMAN) is scheduled to engage in discussions with Dangote Petroleum Refinery on Tuesday and Wednesday to finalize the agreements regarding the pricing and logistics of petrol lifting from the facility.
Sources revealed that the Petroleum Retail Outlet Owners Association of Nigeria was recently requested by the $20 billion refinery, located in Lekki, to resend its petrol lifting request. This development comes as the Petroleum Retail Outlet Owners Association of Nigeria (PETROAN) expressed hopeful sentiments that petrol prices may decrease in the near future, contingent on the growth of competition within the downstream oil market as marketers start sourcing fuel directly from the refinery.
IPMAN has labeled the forthcoming agreement with Dangote Refinery as a pivotal advancement in its efforts to streamline the process of petrol distribution, ultimately aiding in the stability and efficiency of Nigeria’s fuel supply chain.
In a recent move, the Federal Government granted permission for petroleum marketers to directly procure petrol from the Dangote refinery, circumventing the Nigerian National Petroleum Company Limited (NNPC). Wale Edun, the Minister of Finance and Chairman of the Naira-crude sale implementation committee, stated that this decision allows marketers to make direct purchases of Premium Motor Spirit (PMS) from local refineries under mutually agreed commercial terms, fostering competition and enhancing market efficiency.
“We are open to sourcing products from various suppliers, including NNPC, traders, importers, and modular refineries,” commented Gillis-Harry, a representative from PETROAN. “Although we haven’t yet confirmed the exact details of our meeting with Dangote, we have been advised to resend our request, which we have done. We’ve seen a positive turn in response compared to previous silence. We anticipate that PETROAN members will soon begin lifting products from the Dangote refinery, marking significant progress for us and the broader market.”
Regarding the potential for future price reductions, Gillis-Harry noted that petrol prices could drop to around N700 per litre, depending on market volatility. “An abundance of supply in Nigeria could lead to increased competition among sellers, resulting in lower prices as we all aim for minimal profit margins,” he added.
In a related context, IPMAN spokesperson Ukadike announced that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has granted a bulk purchase license to independent marketers, enabling them to lift products directly from the Dangote refinery. He emphasized the importance of immediate implementation of this license and an anticipated import license to promote healthy competition within the industry.
“The issuance of the bulk purchase license will ensure that all stakeholders compete on an equal footing, allowing us to buy products at reasonable rates,” Ukadike stated, expressing concerns about previously higher purchase prices which hindered competition.
Addressing the issue of debts owed to oil dealers by NNPC, Ukadike mentioned that NNPC’s leadership has committed to processing outstanding tickets and releasing funds tied up in their system. He highlighted the financial strain caused by locked funds, which sometimes necessitates bank loans and associated charges impacting fuel pricing.
“By early next week, we expect to announce new pricing, and we aim to dispel the misconception that independent marketers are charging more than NNPC,” he added.
Furthermore, IPMAN is appealing for government support in the form of an energy bank to assist marketers who are grappling with high interest rates that contribute to rising fuel prices.
“We are collaborating with security forces to prevent the theft of fuel products and ensure that the supplies meant for independent marketers reach their designated stations. We are also ensuring that there is no adulteration of the fuel,” Ukadike noted, stressing the precarious financial situation of independent marketers due to significant investments required for petrol procurement.
Join our Channel...