The Dangote Petroleum Refinery has reached a significant agreement with the Independent Petroleum Marketers Association of Nigeria (IPMAN) to supply 60 million litres of Premium Motor Spirit (PMS), commonly known as petrol, each week.
This arrangement, set to be rolled out in the coming weeks, will provide IPMAN with up to 240 million litres of petrol monthly, significantly boosting the association’s distribution capacity.
According to Chinedu Ukadike, IPMAN’s National Publicity Secretary, the deal allows the association’s members to lift petrol directly from the Dangote refinery without the involvement of middlemen. The arrangement is part of Dangote’s broader strategy to enhance fuel distribution across Nigeria, especially as the refinery ramps up its operations.
“We are going to off-take the product in millions of litres. Before now, most of the imported products in Nigeria were distributed through IPMAN,” Ukadike told The PUNCH. “So, we can off-take the products, no matter the millions of litres that are produced. Dangote has offered to give us over 60 million litres, depending on our patronage.”
The deal marks a new phase in the relationship between the Dangote refinery and the country’s independent marketers, many of whom are key players in Nigeria’s petrol distribution network.
As the largest refining operation in the country, Dangote’s refinery is expected to reduce Nigeria’s dependency on imported fuel, which has long been a financial drain on the nation.
The agreement to supply 60 million litres weekly, Ukadike explained, will be scaled according to demand. “The 60 million litres is to be given weekly. We can take and distribute it across the country once we start lifting the product from the refinery,” he added.
While the exact start date of petrol distribution is still being finalised, Ukadike expressed confidence that operations would commence before the end of November.
He emphasised that both parties were currently concluding the necessary documentation to finalize the deal.
“We are finalizing discussions. Documentation is in process. Once they are sorted, we will off-take PMS from the plant. This is going to happen before the end of this month,” Ukadike confirmed.
This direct supply agreement is seen as a significant milestone for IPMAN, as it will streamline fuel distribution and eliminate previous logistical bottlenecks. The association has established a Special Purpose Vehicle (SPV) to manage the off-taking of products, ensuring guaranteed funds for transactions, and replacing the earlier system where individual marketers were tasked with purchasing small quantities of petrol.
The deal comes amid a backdrop of increased competition in Nigeria’s fuel market, particularly after the deregulation of the sector. Petrol prices have been declining in recent weeks, partly due to competition driven by new imports from both the Nigerian National Petroleum Company (NNPC) and other independent marketers. With Dangote’s refinery now poised to supply petrol directly to IPMAN, the Nigerian fuel sector is on track for significant changes that could help stabilize supply and reduce costs for consumers.
(Business Day)
