Emmanuel OchayiThe Dangote Petroleum Refinery has struck a game-changing agreement with the Independent Petroleum Marketers Association of Nigeria (IPMAN) to supply 60 million litres of Premium Motor Spirit (PMS), or petrol, every week. This direct supply deal aims to streamline fuel distribution across Nigeria and eliminate middlemen, offering a significant boost to the nation’s energy sector.
“We are finalising discussions. Documentation is in process. Once they are sorted, we will off-take PMS from the plant. This is going to happen before the end of this month,” said Chinedu Ukadike, IPMAN’s National Publicity Secretary.
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Under the agreement, IPMAN will receive up to 240 million litres of petrol monthly. The arrangement will allow IPMAN members to lift products directly from Dangote Refinery without third-party interference.
Ukadike explained, “We are going to off-take the product in millions of litres. Before now, most of the imported products in Nigeria were distributed through IPMAN. Dangote has offered to give us over 60 million litres weekly, depending on our patronage.”
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This initiative aligns with Dangote’s strategy to enhance fuel availability in Nigeria, especially as the refinery increases its production capacity.
Enhancing Nigeria’s Fuel Distribution
The Dangote Refinery is the largest refining operation in the country. With this partnership, it is set to significantly reduce Nigeria’s reliance on imported fuel, which has drained the nation’s finances for decades.
“This direct arrangement eliminates logistical bottlenecks we faced previously. It’s a win-win for everyone,” said Ukadike.
To facilitate this process, IPMAN has established a Special Purpose Vehicle (SPV) that will oversee transactions and ensure guaranteed funding. This system replaces the earlier model where individual marketers purchased small fuel quantities.
Timeline and Market Impact
While the exact start date for fuel distribution is yet to be finalized, Ukadike expressed optimism that operations would begin before the end of November. The necessary documentation for the deal is currently being processed.
“The 60 million litres is to be given weekly. We can take and distribute it across the country once we start lifting the product from the refinery,” he added.
The move comes amid a competitive fuel market in Nigeria, driven by the deregulation of the sector. With Dangote Refinery now entering the fray, the Nigerian fuel market is set for significant shifts, potentially stabilizing supply and reducing costs for consumers.
A Major Milestone for Dangote Refinery
This deal highlights Dangote Refinery’s growing role in reshaping Nigeria’s petroleum landscape. By addressing supply chain challenges and collaborating directly with marketers, the refinery is paving the way for more efficient fuel distribution in the country.
“This partnership will redefine how petrol is distributed in Nigeria. It marks a significant milestone for IPMAN and the entire fuel sector,” Ukadike concluded.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
