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Petrol Prices May Drop as Dangote Plans to Meet Marketers on Tuesday

Published

2 months ago

Oct 14, 2024.

The Independent Petroleum Marketers Association of Nigeria (IPMAN) is set to engage in talks with Dangote Petroleum Refinery from Tuesday to Wednesday to finalise agreements on the pricing and lifting of petrol from the facility.

According to reports on Sunday, the Petroleum Retail Outlet Owners Association of Nigeria (PETROAN) had been asked by the $20 billion Lekki-based refinery to resubmit its request for petrol lifting.

PETROAN expressed optimism that petrol prices may decrease soon as competition in the downstream oil sector intensifies, especially with more marketers lifting the product from the Dangote refinery.

IPMAN emphasised the importance of the upcoming agreement with Dangote as a critical step in its ongoing efforts to facilitate the lifting of petroleum products, contributing to the stability and efficiency of Nigeria’s fuel supply chain.

Recently, the Federal Government granted permission for petroleum marketers to lift petrol directly from the Dangote refinery without going through the Nigerian National Petroleum Company (NNPC) Limited.

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The Minister of Finance and Chairman of the Naira-Crude Sale Implementation Committee, Wale Edun, announced that marketers could now purchase petrol directly from local refineries under mutually negotiated commercial terms, promoting competition and market efficiency.

IPMAN’s National Publicity Secretary, Chinedu Ukadike, shared updates on Sunday, noting the association’s readiness to commence a business relationship with Dangote refinery. Speaking in an interview with Arise TV, Ukadike revealed that IPMAN had acquired tank farms to improve storage capacity, addressing a previous operational challenge.

He said, “We hope to finalize discussions with Dangote on Tuesday or Wednesday. Once we receive a price template, we’re fully prepared to off-take products. Competition will drive prices down, and we’re well-organized to compete.”

PETROAN President, Billy Gillis-Harry, also confirmed that his association was asked to resend its petrol lifting request to the Dangote refinery. He expressed optimism about the possibility of commencing product lifting soon, stating that PETROAN members were ready to lift products from the refinery.

Regarding potential price reductions, Gillis-Harry suggested that petrol prices could drop to ₦700 per litre depending on market dynamics, adding that an increased supply would drive competition and lower prices.

Ukadike also revealed that the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) had issued a bulk purchase license to independent marketers, allowing them to lift products from the Dangote refinery. He emphasized that healthy competition would only be possible if all stakeholders had equal access to products, criticizing the current pricing disparity.