The Dangote Petroleum Refinery has entered into an agreement with the Independent Petroleum Marketers Association of Nigeria (IPMAN) to supply 60 million litres of Premium Motor Spirit (PMS) weekly, translating to 240 million litres monthly. This development, announced by IPMAN’s National Publicity Secretary, Chinedu Ukadike, is expected to bolster fuel availability nationwide while reducing dependence on imports.
The refinery, a $20 billion investment located in Lekki, Lagos, plans to scale up operations to meet this commitment, with the weekly supply contingent on market demand. Ukadike highlighted that IPMAN’s direct access to fuel from the refinery eliminates intermediaries, ensuring better pricing and distribution efficiency.
“We can take and distribute over 60 million litres across the country, depending on patronage,” Ukadike stated. He added that discussions with Dangote Refinery are nearing completion, with supply expected to commence before the end of November.
Impact of Deregulation and Competition
This partnership comes amid increasing competition in Nigeria’s deregulated downstream oil sector. Since the removal of subsidies, marketers, including the Nigerian National Petroleum Company Limited (NNPCL), have actively imported refined products to stabilize supply. Over two billion litres of PMS have been imported within 42 days, alongside significant quantities of diesel and jet fuel.
The competition has already started driving down petrol prices. “By just the announcement of the IPMAN-Dangote deal, prices have dropped by N10 to N15 per litre,” Ukadike revealed. He predicted further reductions before the year ends as direct refinery supplies improve market dynamics.
A major oil marketer corroborated the trend, stating, “Deregulation is in full swing, and competition is the order of the day.”
Fuel Importation Remains High
Despite the progress, Nigeria’s reliance on fuel imports persists. In October, over 994,000 metric tonnes of PMS were imported, primarily through Lagos, Warri, Port Harcourt, and Calabar ports. These imports, valued at about N3 trillion, underline the ongoing challenges in achieving self-sufficiency, even as the Dangote Refinery ramps up operations.
IPMAN’s New Approach
IPMAN is also streamlining its operations with a Special Purpose Vehicle (SPV) to coordinate bulk purchases and distribution from Dangote Refinery. This move is expected to eliminate inefficiencies caused by middlemen and guarantee funds for its members.
Additionally, IPMAN has urged the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) to release a long-overdue N10 billion Petroleum Equalisation Fund. The regulatory body had previously promised payment to alleviate financial constraints faced by marketers.
Outlook
The Dangote Refinery’s direct supply deal marks a pivotal step in reducing Nigeria’s fuel import dependence. Combined with deregulation and heightened competition, it is expected to stabilize fuel prices and improve distribution. As IPMAN finalizes arrangements, Nigerians anticipate relief at the pump, signaling a promising shift in the nation’s energy landscape.
