Dangote Refinery enters into a weekly gasoline contract with marketers for 60 million liters.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) and the Dangote Petroleum Refinery have signed a major contract for the weekly delivery of 60 million liters of Premium Motor Spirit (PMS), also referred to as gasoline.
This agreement, which will be implemented in the upcoming weeks, will greatly increase IPMAN’s distribution capacity by supplying up to 240 million liters of gasoline each month.
The agreement enables IPMAN’s members to extract gasoline straight from the Dangote refinery without the use of intermediaries, according to Chinedu Ukadike, the organization’s national publicity secretary. The agreement is a component of Dangote’s larger plan to improve petroleum distribution throughout Nigeria, particularly as the refinery expands its capacity.
Millions of liters of the stuff will be off-taken. IPMAN used to distribute the majority of imported goods in Nigeria, Ukadike informed The PUNCH. Therefore, regardless of the millions of liters produced, we can off-take the products. Depending on our business, Dangote has offered to give us more than 60 million liters.
With the agreement, the Dangote refinery and the nation’s independent marketers—many of whom are important participants in Nigeria’s gasoline distribution system—enter a new stage in their partnership.Dangote’s refinery, the biggest in the nation, is anticipated to lessen Nigeria’s reliance on foreign fuel, which has historically proven costly for the country.
Ukadike clarified that the 60 million liters per week supply arrangement would be scaled in accordance with demand. Weekly distribution of the 60 million liters is required. Once we begin removing the product from the refinery, we can transport and distribute it around the nation,” he continued.
Ukadike expressed confidence that operations would begin by the end of November, even though the precise start date for gasoline distribution is still being finalized.
He emphasized that both sides were now completing the paperwork required to complete the transaction.
“We are wrapping up our conversations. The documentation process is underway. We will remove PMS from the plant when they have been sorted. Before the end of this month, this will take place,” Ukadike affirmed.
For IPMAN, this direct supply deal is a major turning point since it will simplify fuel delivery and remove earlier logistical obstacles. The previous system, in which individual marketers were entrusted with buying tiny amounts of gasoline, has been replaced by a Special Purpose Vehicle (SPV), which the association established to manage the off-taking of products and guarantee payments for transactions.
The transaction takes place against the backdrop of heightened competition in Nigeria’s fuel industry, especially following the sector’s deregulation. Due in part to competition from new imports from the Nigerian National Petroleum Company (NNPC) and other independent marketers, petrol prices have been falling in recent weeks. The Nigerian fuel industry is on track as Dangote’s refinery is now ready to provide IPMAN with gasoline directly for important adjustments that would lower consumer costs and stabilize supply.
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