Oil marketers have expressed optimism that the price of Premium Motor Spirit (PMS), commonly known as petrol, will significantly decrease if they are permitted to lift petrol directly from the Dangote Refinery and Petrochemical Plant.
Recent discussions arose after the Nigerian National Petroleum Company Ltd (NNPCL) became the sole distributor of petrol from the 650,000 barrels per day Dangote Refinery, despite earlier denials of such an arrangement.
During a press conference announcing the NNPC-Dangote refinery petrol supply agreement, Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, confirmed that starting October 1, NNPC Ltd. would begin supplying approximately 385,000 barrels per day of crude oil to the refinery, which will be paid for in naira. He further explained that, for now, PMS would only be sold to NNPC, which would then distribute the product to other marketers.
In response, Chinedu Ukadike, spokesperson for the Independent Petroleum Marketers Association of Nigeria (IPMAN), appeared on Channels Television’s Morning Brief on Tuesday and revealed that discussions with the refinery for direct petrol lifting are underway.
Ukadike emphasized that this move aligns with market liberalization efforts, stating, “It’s evident that the market is opening up. We believe Dangote should engage IPMAN directly, as we manage 85% of filling stations nationwide and are well-positioned to distribute all products from the refinery.”
He further noted that allowing IPMAN to independently source petrol from Dangote Refinery would foster competition and potentially lower prices, eliminating the current price disparities. Ukadike pointed to the example of diesel (AGO) when Dangote first began production. “When we entered the market to purchase diesel from Dangote, prices dropped from N1600 to between N1000 and N1100.”
He concluded by stressing that, in a deregulated economy, all stakeholders should have equal opportunities to operate independently, which will lead to a more competitive and fair pricing structure.
