Abuja, Nigeria—A growing chorus of independent petroleum marketers in Nigeria is calling for direct access to Premium Motor Spirit (PMS) from the Dangote Refinery, as concerns mount over the Nigerian National Petroleum Corporation Limited’s (NNPCL) control of the petrol supply chain. This comes after The New Daily Prime gathered that the Federal Government – NNPCL would remain the sole buyer of petrol from the $20 billion Dangote Refinery, which may effectively sideline other marketers from purchasing directly.
Chinedu Ukadike, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), expressed frustration, stating, “The market should be open for all, in line with the willing-buyer, willing-seller commitment previously made by NNPC.” He emphasized that independent marketers should have the ability to buy fuel directly from the refinery, rather than through NNPC’s trading company.
This demand follows NNPC’s earlier statement that it would not be the sole off-taker of Dangote’s petrol. However, just a week later, the government announced that NNPC would, in fact, be the exclusive purchaser, leading to confusion and disappointment among market players.
Dangote Begins Distribution with NNPC as Sole Buyer
At a press briefing on Friday, Wale Edun, Minister of Finance and Coordinating Minister of the Economy, reaffirmed that the Dangote Refinery would begin distributing petrol to marketers on Sunday, September 15, 2024, starting with an initial load of 25 million liters per day. However, he confirmed that these sales would be conducted exclusively through NNPC.
“In return for crude oil paid in naira, Dangote will supply PMS and diesel of equivalent value to the domestic market, also to be paid in naira,” Edun explained, stressing that NNPC would handle all transactions with independent marketers in the short term.
Marketers Seek Liberalization of the Market
Ukadike and other members of IPMAN argue that the market should be fully liberalized to allow all marketers to access fuel directly from Dangote. “We are looking at how to build our logistics and come up with our price,” Ukadike said, calling for increased competition and transparency.
Olufemi Soneye, NNPC’s spokesperson, announced that 300 trucks had been mobilized to lift petrol from the refinery, as part of the agreement reached between NNPC and Dangote. The trucks are expected to deliver the fuel to coastal depots in Warri and Port Harcourt.
Price Concerns and Potential for Lower Fuel Costs
The New Daily Prime gathered that Dangote’s petrol product may likely sell at N766 per liter to NNPC, some industry experts believe the pump price could drop in the coming weeks, particularly in urban areas like Lagos. However, transportation costs and other levies could see prices reach N820 per liter in the northern regions due to logistics challenges.
A senior aide to President Bola Tinubu confirmed the pricing agreement, comparing the deal to previous Direct Sale and Direct Purchase (DSDP) agreements between NNPC and foreign refineries. Many marketers are now hopeful that, despite the initial restrictions, they will soon gain direct access to Dangote’s fuel supply at more competitive prices.
Looking Ahead
The issue has sparked a broader conversation about market deregulation and the role of NNPC as a key player in Nigeria’s oil sector. As the Dangote Refinery ramps up production, the calls for liberalizing the fuel market will likely intensify, placing pressure on the government to ease its grip on the supply chain.
With fuel being a critical commodity in Nigeria, any changes to the distribution system could have far-reaching effects on the economy, transportation, and everyday life. The coming weeks will be crucial in determining whether independent marketers will be granted the access they are demanding, or if NNPC will maintain its monopoly over the nation’s petrol supply.
