- Dangote Petroleum Refinery announced the offer of incentives to three major downstream sector operators.
- Dangote Refinery had said the strategic move was designed to stabilise the nation’s fuel market
- The bulk purchase agreement with Dangote Petroleum Refinery had also enabled both Ardova and Heyden to secure a reliable and consistent supply of petroleum
Oil marketers in Nigeria are increasingly vying for bulk-purchase agreements offered by the Dangote Petroleum Refinery due to the incentives and price stability they provide compared to purchases from depot owners.
Eko Hot Blog gathered that the recent increase in loading prices by depot owners has prompted many independent marketers to seek alternatives, leading them to consider Dangote’s bulk-purchase agreements.
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Notably, Ardova Plc and Heyden Petroleum have already entered into such agreements with the Dangote Petroleum Refinery, joining MRS, which has also leveraged the agreement to sell petroleum at a lower pump price.
This situation contrasts with the recent price hike by depot owners, who have raised prices to N950 per liter from N909, citing rising international crude oil prices.
Alhaji Abubakar Maigandi Garima, the National President of the Independent Petroleum Marketers Association (IPMAN), has confirmed that association members are eager to enter into agreements with the Dangote Refinery.
He advised members to pool their resources to qualify for bulk-purchase agreements, underscoring the appeal of the incentives offered by the Dangote Petroleum Refinery amid ongoing market volatility.
IPMAN has shifted its strategy, recognizing the benefits of buying directly from Dangote Petroleum Refinery rather than relying on depot owners.
With a minimum purchase requirement of two million liters at N909 per liter, the bulk-purchase agreement offers competitive prices and stability for members.
Citing the economic relief provided by President Bola Ahmed Tinubu’s crude-for-naira swap initiative, Dangote Petroleum Refinery announced the offer of incentives to three major downstream sector operators.
This move allows for reduced pump prices, providing financial relief for Nigerians.
Following the footsteps of MRS, Ardova Plc, and Heyden, numerous petroleum marketers have flocked to the refinery in Ibeju-Lekki, Lagos, seeking similar bulk-purchase agreements.
These deals ensure a consistent supply of petroleum products at competitive prices, addressing the need for a stable market.
The desire to be part of the bulk-purchase agreement, it was also gathered, was also apparently being fueled by the testimonies from motorists who have been praising the impressive burn rate of fuel sourced from Dangote Refinery and sold in MRS filing stations which they said lasts longer compared to other products imported into the country and sold by others.
Dangote Refinery had said the strategic move was designed to stabilise the nation’s fuel market further and enhance energy security for consumers, as it would guarantee a steady supply of petroleum products at affordable prices.
The bulk purchase agreement incentive by Ardova and Heyden came on the heels of a drop in the pump price of petrol by the management of MRS Oil Nigeria Plc, which had previously entered into a similar agreement with Dangote Refinery.
As a result, MRS Oil lowered its fuel prices to N935 per litre across all its stations nationwide, addressing the long-standing issue of price disparities between states.
Furthermore, MRS Oil’s stock surged to a new 52-week high recently, as investors became increasingly optimistic about the company’s future earnings prospects.
Reports indicate that the bulk purchase agreement with Dangote Petroleum Refinery had also enabled both Ardova and Heyden to secure a reliable and consistent supply of petroleum products from the world’s largest single-train refinery at competitive prices, benefiting consumers across the country.
The arrangement ensures that Ardova and Heyden will have access to a full range of refined products, thereby securing their operations with a reliable supply chain.
Other petroleum markers, reports said, are keen on signing similar agreements with Dangote Refinery as soon as they are allowed to, as most of them have a majority of their filing stations in Lagos close to Dangote Refinery.
After signing the agreement, Ardova Plc, it would be recalled, had in a statement underscored the importance of this agreement in fostering a more competitive environment within Nigeria’s downstream oil and gas sector.
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The partnership with Dangote Refinery is poised to have a positive, transformative impact on Nigeria’s oil and gas market.
By ensuring a stable and affordable supply of fuel products in the over 1,000 retail outlets of the two companies, the agreement will help to alleviate the recurring issue of fuel scarcity that has long plagued Nigeria.
