The Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Dangote Petroleum Refinery have signed a major contract for the weekly delivery of 60 million litres of Premium Motor Spirit (PMS), also referred to as petrol.
This agreement, which will be implemented in the upcoming weeks, will greatly increase IPMAN’s distribution capacity by supplying up to 240 million litres of fuel each month.
The agreement enables IPMAN’s members to extract petrol straight from the Dangote refinery without intermediaries, according to Chinedu Ukadike, the organization’s national publicity secretary. The agreement is a component of Dangote’s larger plan to improve petroleum distribution throughout Nigeria, particularly as the refinery expands its capacity.
“We are going to off-take the product in millions of litres. Previously, most imported products in Nigeria were supplied via IPMAN,” Ukadike told reporters. “So, we can off-take the products, no matter the millions of litres that are produced. Dangote has offered to provide us more than 60 million litres, contingent on our patronage.”
With the agreement, the Dangote refinery and the nation’s independent marketers – many of whom are important participants in Nigeria’s petrol distribution system – enter a new stage in their partnership.
Dangote’s refinery, the biggest in the nation, is anticipated to lessen Nigeria’s reliance on foreign fuel, which has historically proven costly.
Ukadike clarified that the 60 million litres per week supply arrangement would be scaled per demand. “The 60 million litres is to be given weekly. Once we begin removing the product from the refinery, we can transport and distribute it around the nation,” he continued.
Ukadike expressed confidence that operations would begin by the end of November, even if the precise start date for petrol distribution is still being finalized.
He underlined that both sides were completing the paperwork required for the transaction.
“We are finalizing discussions. The documentation process is underway. We will remove PMS from the plant when they have been sorted. Before the end of this month, this will take place,” Ukadike affirmed.
For IPMAN, this direct supply deal is a major turning point since it will simplify fuel delivery and remove earlier logistical obstacles.
The previous method, in which individual marketers were entrusted with buying tiny amounts of petrol, has been replaced by a Special Purpose Vehicle (SPV), which the association established to supervise the off-taking of products and guarantee cash for transactions.
The transaction occurs against the backdrop of heightened competition in Nigeria’s fuel industry, especially following the deregulation of the sector. Due in part to competition from new imports from the Nigerian National Petroleum Company (NNPC) and other independent marketers, petrol prices have been falling in recent weeks.Â
The Nigerian gasoline industry is about to undergo major changes that could help stabilize supply and lower consumer costs since Dangote’s refinery is now ready to provide petrol straight to IPMAN.
