IPMAN To Engage In Key Negotiations With Dangote Refinery

The Independent Petroleum Marketers Association of Nigeria (IPMAN) is preparing for a significant meeting with the Dangote Petroleum Refinery between Tuesday and Wednesday to finalize agreements on the cost and logistics for lifting petrol from the $20bn Lekki-based facility.

This follows last week’s approval by the Federal Government, allowing marketers to source petrol directly from local refineries without involving the Nigerian National Petroleum Company (NNPC).

The agreement with Dangote is expected to mark a pivotal shift in the downstream petroleum sector, potentially leading to increased competition and a reduction in petrol prices. According to Chinedu Ukadike, the National Publicity Secretary of IPMAN, the association is optimistic about the benefits of this development and is ready to commence business with the refinery.

In an interview w, Ukadike revealed that IPMAN had overcome previous operational challenges, such as the lack of storage facilities, by acquiring tank farms to enhance distribution. He expressed confidence that competition in the market would drive prices down, stating, “We are prepared for healthy competition and are confident that this will lead to a reduction in the cost of petrol.”

Meanwhile, the Petroleum Retail Outlet Owners Association of Nigeria (PETROAN) is also in talks with the Dangote Refinery. PETROAN President, Billy Gillis-Harry, shared that they had been asked to resend their request for petrol lifting and were optimistic about reaching an agreement soon.

The refinery’s direct sale to marketers is part of a broader deregulation initiative by the government aimed at enhancing market efficiency. This development has been hailed by industry stakeholders as a crucial step towards achieving stability in Nigeria’s fuel supply chain.

Ukadike further disclosed that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) had issued bulk purchase licenses to independent marketers, allowing them to lift products directly from Dangote’s facility. Additionally, marketers have been promised import licenses to boost supply, fostering a competitive environment.

Despite the positive strides, challenges remain. Ukadike highlighted the high cost of purchasing petrol post-subsidy removal, with marketers now paying close to N50 million for a 45,000-litre truck of petrol, up from N8.1 million. He called on the government to establish an energy bank to provide financial assistance to marketers struggling under high-interest rates.

As negotiations progress, both IPMAN and PETROAN anticipate that the new arrangements will lead to increased petrol availability and potentially lower prices for Nigerian consumers.