Lagos – September 26, 2024 — Oil marketers, represented by the Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), are pushing for direct transactions with Dangote Petroleum Refinery, bypassing the Nigerian National Petroleum Company Limited (NNPCL). This move seeks to avoid purchasing petrol through NNPCL, the current sole off-taker of Premium Motor Spirit (PMS) from the $20bn Dangote Refinery in Lekki.
The marketers expressed concerns over NNPCL being a competitor and are looking to establish a direct relationship with Dangote Group. IPMAN officials, in ongoing discussions, aim to secure direct access to PMS, stating that purchasing directly from the refinery is more efficient than going through another marketer.
While no date has been set for an official meeting, IPMAN’s Secretary, Terlumun James, acknowledged the association’s commitment to providing adequate products for the public. He emphasized the need for IPMAN to source directly from Dangote’s refinery, which holds the potential for better pricing and competition.
The shift comes as the Nigerian Economic Summit Group (NESG) called for the Federal Government to support the Dangote refinery while avoiding long-term monopolies in the downstream oil sector. NESG emphasized that competition would benefit consumers by lowering prices through market forces.
IPMAN’s spokesman, Ukadike Chinedu, reinforced the desire for a “willing-buyer, willing-seller” relationship with Dangote, aligning with the deregulated market structure. He hinted that IPMAN would continue sourcing fuel from NNPCL and other sources if Dangote doesn’t engage with them directly.
Meanwhile, major marketers under the Major Oil Marketers Association of Nigeria (MOMAN) have already begun lifting PMS from Dangote’s refinery. Over 50 million litres of petrol were loaded last week alone, with reports suggesting more is to follow as the refinery ramps up production.
The Dangote Refinery, boasting a capacity of 650,000 barrels per day, is expected to fully operate within four months. However, tensions have risen regarding pricing, with NNPCL claiming it purchases PMS from Dangote at N898 per litre— a claim the refinery refuted. Dangote officials argued that NNPCL’s price includes additional costs and that its PMS is about 15% cheaper than imported alternatives.
The Federal Government has stated it will not intervene in the price dispute between NNPCL and Dangote, stressing that both entities are private companies operating in a deregulated market. Special Adviser to the President on Information and Strategy, Bayo Onanuga, confirmed that any pricing issues are the companies’ responsibility, and competition between them could ultimately benefit Nigerian consumers by driving down fuel prices.