KEY POINTS
- Dangote Refinery to supply 240 million liters of petrol monthly to IPMAN.
- The agreement bypasses middlemen, reducing costs and boosting efficiency.
- Petrol prices drop as deregulation fosters competition and efficiency.
The Dangote Petroleum Refinery has committed to supplying the Independent Petroleum Marketers Association of Nigeria (IPMAN) with 60 million liters of Premium Motor Spirit (PMS) weekly, equivalent to 240 million liters monthly. This direct partnership aims to enhance fuel distribution efficiency across Nigeria while addressing rising demand.
Agreement to strengthen Nigeria’s fuel supply chain
Under this new deal, IPMAN members will source PMS directly from the refinery, bypassing middlemen. Chinedu Ukadike, IPMAN’s National Publicity Secretary, emphasized the strategic importance of the agreement, which positions the association as a significant distributor of fuel nationwide.
“This direct supply arrangement allows us to take and distribute large volumes of PMS efficiently. With Dangote offering over 60 million liters weekly, we are positioned to enhance fuel availability across Nigeria,” Ukadike stated.
Discussions between Dangote Refinery and IPMAN are in the final stages, with expectations that distribution will commence before the end of November. This collaboration promises to stabilize fuel availability and reduce costs for consumers.
Competitive pricing lowers pump prices
The agreement between Dangote and IPMAN is already impacting petrol prices, with reductions of ₦10–₦15 per liter in some areas. The competition introduced by the deregulation of Nigeria’s downstream sector has also played a role in the price drop.
Ukadike noted, “The mere announcement of this agreement has contributed to price reductions, and we anticipate further decreases once distribution fully begins.”
According to Punch, market analysts and major oil marketers confirm that deregulation has fostered competition, which has benefited consumers. Although prices remain above ₦1,000 per liter in some regions, gradual reductions are expected as supply chains stabilize.
Refinery boosts capacity amid funding challenges
While the Dangote Refinery continues to ramp up operations, it is seeking funding to secure crude oil supplies and increase production capacity. Reports suggest that the refinery requires approximately $2 billion every 90 days to sustain operations and maximize output.
Despite the initial production of petrol and other products, the refinery faces challenges securing a steady crude oil supply due to currency fluctuations and global oil market dynamics. Efforts to address these challenges include talks with local and international financiers.
With a full capacity of 650,000 barrels per day, the Dangote Refinery is poised to transform Nigeria’s fuel sector. The facility has already begun producing jet fuel and naphtha, signaling progress toward reducing the country’s dependence on fuel imports.
