November 12, 2024 — The Independent Petroleum Marketers Association of Nigeria (IPMAN) has reached a significant agreement with Dangote Refinery to directly source premium motor spirit (PMS), diesel, and other petroleum products for distribution across the country. This development was disclosed by IPMAN’s National President, Abubakar Garima, after a meeting of the association’s National Working Committee in Abuja.
The new partnership comes months after the Nigerian National Petroleum Corporation (NNPC) backed away from its plan to be the sole off-taker of products from the 650,000 barrels per day Dangote Refinery, which is the largest in Africa and Europe.
Key Details of the Agreement
Garima confirmed that following a meeting with Alhaji Aliko Dangote and his management team in Lagos, Dangote Refinery has agreed to supply IPMAN with premium motor spirit (PMS), automotive gas oil (AGO), and dual-purpose kerosene (DPK) directly for distribution to IPMAN’s depots and retail outlets nationwide.
“This collaboration will ensure a steady, affordable supply of petroleum products across the country,” Garima said, emphasizing the importance of supporting local refining operations like Dangote’s, which have the potential to positively impact Nigeria’s foreign exchange market and create significant job opportunities.
Support for Local Refineries and Pricing Negotiations
In his address, Garima encouraged IPMAN members to focus on sourcing products from Dangote Refinery and other Nigerian refineries. This move, he noted, aligns with President Bola Tinubu’s economic agenda and aims to foster greater self-reliance in Nigeria’s energy sector.
While Garima did not provide specific details on pricing, he expressed optimism that discussions with Dangote Refinery would lead to more competitive rates for petroleum products. The agreement is seen as a step toward reducing the cost of fuel and eliminating intermediaries from the supply chain, thus ensuring a more efficient and affordable energy market.
Transition to Compressed Natural Gas (CNG)
Garima also highlighted the ongoing efforts by IPMAN to establish a nationwide network of CNG refill stations. He reassured members that the association would collaborate with the federal government to ensure the necessary infrastructure and incentives for the seamless adoption of CNG in Nigeria’s transport sector.
“CNG has immense potential to drive economic growth and reduce environmental impact. IPMAN is committed to supporting this transition and partnering with the federal government to ensure its success,” Garima stated.
Implications for Nigeria’s Petroleum Industry
The agreement between IPMAN and Dangote Refinery is expected to streamline petroleum distribution, enhance efficiency, and drive affordability. By eliminating middlemen, the direct supply arrangement will allow for a more consistent and cost-effective supply of petroleum products to over 30,000 IPMAN members and 150,000 retail outlets across Nigeria.
Dangote Refinery, which began producing diesel and aviation fuel earlier this year, is progressing towards full-scale production. The refinery’s ability to meet local demand, in addition to exports, represents a significant shift in Nigeria’s energy sector, which has long relied on imported fuel.
The agreement comes at a crucial time when the Nigerian petroleum industry is seeking ways to ensure a more sustainable and affordable energy future. The direct relationship between IPMAN and Dangote Refinery is a step toward achieving those goals, while also supporting national economic growth and energy security.
