Dangote direct purchase: Marketers demand working refineries

The Independent Petroleum Marketers Association of Nigeria has charged the Federal Government to complete all refineries under the management of the Nigerian National Petroleum Company Limited and stop making the Dangote Petroleum Refinery a monopoly in the downstream oil sector.

This came as the Federal Government granted permission to petroleum marketers to lift petrol directly from the Dangote refinery without going through NNPC.

After several days of battling the crude supply crisis, the Dangote refinery commenced the sale of petrol on September 15, 2024, selling to only NNPC, which served as a middleman between the refinery and the marketers.

However, the supply chain was not as effective as planned, prompting independent marketers to demand direct transactions with the $20bn refinery.
Similarly, the issue of pricing remains a contentious one. The NNPC suddenly increased the pump price of petrol to N1,030 per litre on Wednesday.

Since Wednesday, queues have resurfaced in filling stations across the country as some stations sell for as high as N1,300 per litre.

On Friday, the Federal Government confirmed the speculation that the NNPC would no longer be the sole off-taker of Dangote fuel.
In a statement, the Minister of Finance and chairman of the naira-for-crude sale implementation committee, Wale Edun, gave an update on the takeoff of the crude purchase and product sales in naira transaction.

The implementation committee was said to have held its second post-commencement review meeting on October 10 to evaluate the progress of the crude oil and refined products sales in naira initiative.

The committee was set up by the government to oversee the sale of crude oil to Dangote and other local refineries in naira.

“The committee is pleased to report a successful transition of operations in line with the directive issued by the Federal Executive Council. This directive has established a robust framework for local production and distribution of crude oil and refined products for local consumption in naira.

“With this mechanism now in full operation, along with the commencement of local production, we are well-positioned to transition to a fully deregulated market for all petroleum products.

“Moving forward, petroleum product marketers are now able to purchase PMS directly from local refineries without the intermediary role of NNPC. Marketers are encouraged to initiate direct purchases from refineries on mutually negotiated commercial terms, which will promote competition and improve market efficiency,” the statement said.

Edun added that the government remained confident that, in the long term, these measures will create better market conditions for the benefit of all Nigerians.
Stop monopoly

In an interview with our correspondent, IPMAN challenged the Nigerian National Petroleum Company Limited to stop the seeming monopoly of the Dangote refinery by completing government-owned refineries.

The National Publicity Secretary of IPMAN, Chinedu Ukadike, said the NNPC should rise to crash the pump price of petrol if the Dangote price was too high.
He noted that Dangote would fix its prices in accordance with the price of crude oil in the international market.

According to him, the NNPC can sell petrol at N750 per litre if the Port Harcourt refinery and others resume operations.

However, he regretted that the Port Harcourt refinery failed to commence production despite seven postponements.

Ukadike said, “Now that the NNPC has seen that the high cost of Dangote fuel will have a toll on them, they also should ensure that the Port Harcourt refinery is revamped to be able to challenge Dangote. They should use the NNPC refineries to bring down the price of PMS.
“We, as independent marketers, are ready to buy the product wherever it is available and cheap for our stations to continue to run. We have the capacity to load the product from anywhere.”

The IPMAN spokesman revealed that the association had acquired a tank farm in Calabar, saying more would be acquired across the country for easy distribution of fuel.

“Immediately you pay through our portal, you get your product. You will not be at the mercy of anybody. With this, we can compete with others. Everybody should be given a level playing ground,” he noted.

Ukadike stressed that the issue of availability had been conquered as Dangote had declared that he would supply products that the country would consume.

However, he lamented that the product was not yet in circulation, saying the supply system was chaotic.

He called on the Federal Government to have a round-the-clock discussion with all the players in the industry.

The marketer charged the NNPC to revamp all abandoned refineries for easy movement of fuel across the nation.
“The Federal Government can start selling its fuel at N750 in Port Harcourt refinery. We marketers will go and buy and put a small margin to sell to our numerous customers, and Nigerians will be happy.

“If Warri is selling, we won’t be begging Dangote to sell to us. If Warri, Port Harcourt and Kaduna are selling, Dangote will be begging us,  and we, the independent marketers, will be begging customers to come and patronise our filling stations,” he stressed.

Recall that IPMAN had earlier threatened to stop operations nationwide due to the high cost of petrol sold to its members by NNPC.

IPMAN had revealed on Thursday that the cost of petrol from the Dangote refinery to NNPC was about N898/litre but noted that the corporation was selling the same product to independent marketers at N1,010/litre in Lagos.

The association, which controls over 70 per cent of filling stations nationwide, kicked against this and threatened to down tools, as it also demanded a refund from NNPC for earlier petrol supply payments made by its members.

This development may further worsen the scarcity of petrol and the queues in many parts of the country.