Faith Nyasuguta
In a landmark move set to reshape Nigeria’s petroleum market, the Dangote refinery has committed to supplying 60 million liters of Premium Motor Spirit (PMS), commonly known as petrol, per week to the nation’s oil marketers.
This deal, negotiated with the Independent Petroleum Marketers Association of Nigeria (IPMAN), is expected to bypass traditional supply chains by cutting out the middleman and allowing marketers to lift petrol directly from the refinery.
The agreement, announced by Chinedu Ukadike, IPMAN’s National Publicity Secretary, promises significant advantages for the local market. Ukadike emphasized that this direct supply line would enhance efficiency and reduce prices.
“We are going to off-take the product in millions of liters. Before now, most of the imported products in Nigeria were distributed through IPMAN. Dangote has offered to give us over 60 million liters, depending on our patronage,” Ukadike told The Punch.
The deal, currently in the final stages of negotiation, is anticipated to come into effect by the end of the month once all terms are finalized. This agreement will see IPMAN receiving approximately 240 million liters of petrol monthly, bolstering the local supply and stabilizing prices.
The recent announcement has already created a ripple effect in the market. According to reports by The Punch, petrol prices witnessed a decrease of up to N10-N15 per liter over the weekend, driven by the competitive pressure from the planned direct distribution. This shift marks an early sign of relief for consumers who have faced fluctuating and often high fuel prices due to the involvement of intermediaries.
Ukadike noted the broader implications of the agreement: “Independent marketers are no longer buying from middlemen. We are going to be buying directly from the producer. So, the competition is setting in. I also want to tell you that before the end of this year, the price will not be as high as what you see now.” He highlighted that IPMAN’s partnership with Dangote is set to further stabilize and potentially reduce fuel prices across Nigeria, contributing to economic relief.
This strategic development comes as the Nigerian government continues its push for deregulation of the oil sector to foster market-driven pricing and enhance the nation’s energy security. The Dangote refinery, a significant addition to Nigeria’s energy landscape, plays a pivotal role in this effort as the largest single-train refinery in the world.
With implementation expected soon, all eyes are on this deal’s impact on the fuel market and its potential to transform supply dynamics in Nigeria.
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