IPMAN, Dangote refinery meet to finalize petrol supply deal

The Independent Petroleum Marketers Association of Nigeria is scheduled to meet with Dangote Petroleum Refinery on Tuesday and Wednesday to finalize agreements on the cost and lifting of petrol from the plant.

It was revealed on Sunday that the $20 billion Lekki-based refinery has urged the Petroleum Retail Outlet Owners Association of Nigeria to resend its request for petrol lifting.

PETROAN expressed optimism that the cost of fuel will fall in the coming days as competition in the downstream oil industry intensifies and marketers load the commodity from the refinery.

Meanwhile, IPMAN highlighted the proposed deal with the Dangote refinery as a critical step in the organization’s continuous efforts to facilitate the lifting of petroleum products, thereby contributing to the stability and efficiency of the country’s fuel supply chain.

Last Monday, the Federal Government authorized petroleum merchants to lift petrol directly from the Dangote refinery without going through the Nigerian National Petroleum Company Limited.

The Minister of Finance and Chairman of the Naira-crude sale implementation committee, Wale Edun, had in a statement, said, “Moving forward, petroleum product marketers are now able to purchase PMS (petrol) directly from local refineries without the intermediary role of NNPC.

“Marketers are encouraged to initiate direct purchases from refineries on mutually negotiated commercial terms, which will promote competition and improve market efficiency.”

In an update on Sunday, IPMAN’s National Publicity Secretary, Chinedu Ukadike, said the association intended to meet with officials from the Dangote refinery for discussion since it is ready to begin a constructive business relationship with the refinery.

Ukadike, speaking during an interview observed by our correspondents on Arise TV, stated that the association had acquired tank farms to improve its storage capabilities, addressing a previously impeded operation.

He said, “We hope to sit down with Dangote maybe Tuesday or Wednesday and if they give us a template or price, we will move to Dangote. I want to reassure you that we have all it takes to off-take whatever Dangote will give to us. I don’t know why they are dragging their legs to discuss with marketers, maybe it is politics.

“The more we take action in terms of distribution lines, the price will come down, we are not afraid of this competition, we have organised ourselves and are ready to compete because this is the survival of the fittest.

“The issue of not having tank farms is gone because we have addressed the issue and now have farm tanks and anywhere Dangote says they will give us our products, we will distribute them to our marketers.”

Billy Gillis-Harry, President of PETROAN, stated that his group had been instructed to resend their request to take petrol from the plant.

“We have written to them (Dangote) several times and they are fully aware of what PETROAN has been doing. One of the executive directors there called me to say that they are going to set up a meeting with us, so we are waiting for that to happen. Hopefully, we can do that this week.

“We are willing to take products from all of them, NNPC, traders, importers, Dangote refinery, modular refineries, etc. So, we are in that pursuit. We have not received confirmation of the meeting with Dangote yet, but we have been told to resend our request, which we have done.

“And I think that is a positive response compared to before when they were just keeping quiet. So, any moment from now PETROAN members should start lifting products from the Dangote refinery and it is good news for us and everyone,” Gillis-Harry stated.

On whether the price of petrol would drop in the future, the PETROAN president added, “The price can be knocked down to N700/litre; it depends on the volatility of the market and this does not always mean upward prices, it could also mean prices coming down.

“If we have massive supply and there are a lot of products in Nigeria, obviously everybody will be looking for just minimal profit. Our business is focused on turnover, so people may cut prices down.”

Meanwhile, Ukadike, the IPMAN spokeswoman, revealed that the Nigerian Midstream and Downstream Petroleum Regulatory Authority has awarded a bulk purchase license to independent marketers allowing them to off-take from the Dangote refinery.

“The NMDPRA has issued a bulk purchase license for independent marketers so that we can offtake from the Dangote refinery. We want this to take effect immediately. We have also been promised an import license so that we can import. These are the factors of deregulation.

“When you implement it, you have put all the stakeholders in the same line so that the competition will be healthy. It is not putting some people before others. How can we buy products at N1,040 and say there is competition? It is designed to edge us out and make us dependent on NNPC and its sources.

“The NMDPRA boss told our national president that we would be issued an import license on Friday. But you know all these processes have bureaucratic procedures. Before we didn’t have this chance but today, the situation has improved,” he noted.

On the NNPC’s debt to oil traders, Ukadike stated, “The NNPC boss has agreed to load out all of our tickets that are in their system and unlock the money.” We sometimes acquire these funds from bank loans, and when they are locked up, we pay bank fees, which affects the price of fuel.

“They haven’t loaded us out as I speak to you now; they have also not revealed the new price. It is only when they do that, that we will look at the remittance we are going to pay but our president insisted that since this money has been locked up with them, they should give us at the old price so that we can use it to cushion the bank charges and other expenses we have incurred so far.

“By Monday or Tuesday, the new price will be out and I will announce it. We don’t want that impression that independent marketers are selling higher than NNPC.”

Continuing, IPMAN sought government support in financing by establishing an energy bank to assist marketers in the aftermath of high interest rates, which impacted pricing hikes.

“We are working with security agencies to ensure that products are not stolen out of this country, and products meant for independent marketers go to their stations. Also, we are working to ensure there is nothing like adulteration.”

He claimed that independent marketers were on the edge of bankruptcy due to the significant investment required to purchase a single truck carrying 45,000 litres of petrol.

“Before the subsidy removal, we bought products at N8.1m, but now we are buying it close to N50m. How many people can survive that?”