- Agreement signals end to middlemen in PMS distribution.
- Dangote’s price reduction fuels increased market demand.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has officially commenced lifting Premium Motor Spirit (PMS), commonly known as petrol, directly from the Dangote Petroleum Refinery. This development follows a significant agreement reached between IPMAN and the refinery in late October.
Chinedu Ukadike, the National Publicity Secretary of IPMAN, disclosed that the lifting process began in November, with millions of liters of petrol already transported from the refinery situated in the Lekki Free Trade Zone, Lagos.
According to Ukadike, the initial loading of petrol was facilitated through MRS Oil as part of a transitional arrangement. He clarified that this process was temporary and necessary for bridging gaps while finalizing the terms of the agreement.
“There is a pre-arrangement in place. Our experts are finalizing the documentation. In the meantime, Dangote has supplied products to us through MRS Oil, ensuring continuity as the agreement terms are solidified,” Ukadike explained.
Price Drop Boosts Demand
The Dangote Refinery recently reduced its PMS price from N990 to N970 per liter, a move that has significantly increased demand in the local market. Ukadike noted that this price adjustment, coupled with the elimination of middlemen, has positively influenced petrol pricing and availability across the country.
“The price reduction by Dangote has strengthened the economy and reduced profiteering by eliminating the middleman. Marketers can now access products directly after making payments,” Ukadike emphasized.
Historical Shift in Supply Chain
The Federal Government previously designated the Nigerian National Petroleum Company Limited (NNPC) as the sole distributor of Dangote refinery products. However, inefficiencies in this arrangement prompted independent marketers to seek direct access.
In October, Finance Minister Wale Edun announced a shift, allowing marketers to purchase directly from local refineries under mutually negotiated commercial terms. This decision was welcomed by stakeholders who believe it will enhance competition and market efficiency.
IPMAN’s National President, Abubakar Maigandi, confirmed that a deal with Dangote was signed in November. He expressed optimism that this partnership would improve distribution and stabilize fuel prices.
Refinery Challenges and Competitive Pricing
Despite this milestone, IPMAN has voiced concerns over the Port Harcourt Refinery’s pricing of PMS at N1,030 per liter, stating that such rates are uncompetitive. The association continues to advocate for affordable fuel prices to benefit Nigerian consumers.
Nigeria’s Fuel Trade Snapshot
According to the National Bureau of Statistics (NBS), Nigeria imported PMS worth N3.32 trillion in Q3 2024, alongside diesel imports valued at N1.33 trillion. During the same period, the country exported crude oil worth N13.40 trillion, emphasizing its dependency on crude exports.
The Dangote Refinery’s direct sales model marks a significant shift in Nigeria’s petroleum landscape, potentially reducing costs and streamlining the supply chain for fuel distribution.
