The Independent Petroleum Marketers Association of Nigeria has secured an agreement with Dangote Petroleum Refinery to lift products directly.
This, according to the
association, will ensure the availability of petroleum to Nigerians at a
cheaper rate.
IPMAN’s National President,
Abubakar Garima, announced this at a press briefing on Monday in Abuja,
following a meeting of the National Working Committee of the association.
He explained that the Dangote
refinery had obliged IPMAN to lift PMS, AGO and DPK directly for onward supply
to IPMAN depots and retail outlets. This new arrangement with the Dangote
refinery would ensure a steady and ceaseless supply of PMS products all over Nigeria
at an affordable rate.
He said, “Following our recent
meeting with Alhaji Aliko Dangote and members of his top management staff in
Lagos, we are happy to state the following; Dangote Refinery has obliged IPMAN
to lift PMS, AGO and DPK directly for onward supply to IPMAN depots and retail
outlets. That this new arrangement with the Dangote refinery will ensure a
steady and ceaseless supply of PMS products all over Nigeria, at an affordable
rate for Nigerians also.”
On October 29, the founder of
Dangote Industries Limited, Aliko Dangote, said the refinery held over 500
million litres of petrol, but added that oil marketers were not buying his
product.
In a counter-response, IPMAN
said its members had been unable to load petrol from the Dangote refinery for
days. Garima said the association paid N40bn to the Nigerian National Petroleum
Company Limited, but still cannot source the product – but the refinery said it
has not received any payment from the IPMAN for refined petroleum products.
Speaking further at the
briefing, Garima urged IPMAN members to support Dangote Refinery, citing
backward integration benefits and positive impacts on Nigeria’s Foreign Exchange
market.
Regarding pricing, Garima
expressed confidence that negotiations with Dangote would yield lower rates.
“All IPMAN members should fully
support the Dangote refinery, as it’s the ideal thing to do considering the
monumental benefits of backward integration and the medium to long-term impact
it will have on the Foreign Exchange markets in Nigeria.
“IPMAN members nationwide
should rely on the Dangote refinery and Nigerian rfineries for their white
products, as this will translate into ensuring more job opportunities in
Nigeria, as well as signify total support for President Bola Tinubu’s Renewed
Hope Agenda,” he added.
Commenting, an Energy expert
Kelvin Emmanuel, said the new agreement would eliminate financing and margin
costs incurred by the NNPCL.
He said, “What is cheery about
this news is that NNPC’s letter of credit as financing cost ($28 per metric
tonne) that is passed to IPMAN — controlling 30,000 retail stations and their
margin ($26.48 per metric tonne) will be removed.”
The IPMAN president also stated
that the association is preparing for a smooth transition to nationwide CNG
refill stations, as it is currently in negotiations with the presidential CNG
initiative.
“On CNG, I would also like to
call on all our members at IPMAN to begin to put all types of machinery in
place for a successful transition of the Federal Government’s plans to initiate
CNG refill stations in all our outlets. Truly there is no doubt that CNG has
the potential to rejuvenate our economy for a better life for Nigerians, and
IPMAN is ready to give her all to support the CNG initiative.
“IPMAN is also calling for a
partnership with the Federal Government of Nigeria to hasten the quick success
of the CNG initiative for Nigeria. We believe that for the CNG initiative to
succeed there must be a credible partnership between IPMAN and the PCNGI,
without which Nigerians would not have ready and near access to CNG outlets.”
This partnership between Dangote
and IPMAN is expected to increase efficiency, affordability, and economic
growth for Nigeria’s petroleum industry. This move is expected to eliminate
middlemen, reduce costs, and ensure steady supply.
Early this year, the Dangote
Refinery said it would supply fuel to about 150,000 retail outlets operated by
oil marketers.
In his remarks, the chairman,
Board of Trustees of the association, Aminu Abdukadir, said that IPMAN must
remain committed to providing the retail stations and funds to ensure that products
are delivered to consumers.
“The business of making money
without doing anything is over with the deregulation of the sector. For IPMAN
to survive, it must provide the filling stations, the money, the trucks, to
provide this commodity to motorists,” he said.
Meanwhile, the Executive Secretary of the Major Energy Marketers Association of Nigeria, Clement Isong, has explained that the final landing price is determined by several key factors, including the exchange rate, logistics efficiency and cost negotiating power based on volume bought.
The ES in an interview with our
correspondent on Monday, said this in response to the expectation of a
reduction in petrol prices following a 20.34 per cent decrease in landing costs
to N971.57 per litre.
He noted that oil marketers peg
their price by the average cost of petrol import within 30 days and not on the
daily spot price.
Isong said, “If you read our
bulletin, there is not one landing price for the whole country. What we are
saying is to give an idea of the landing pricIf if you land 38,000 metric
tonnes into ASBM in Apapa, this is the landing price. That’s what we are
saying. If you land 100,000 MT, or 80,000 MT into Pinnacle, the landing price
will be lower. But there are only two places where the landing price will be
lower due to economies of scale. If you land in the majority of the country,
the depots and facilities take less. So, if you land it into another place in
Lagos, the landing price will be higher. It won’t be N971 per litre. It can be as
close to N1,000.
“So, the landing price is in
function of how much you got your exchange rate, logistics and your negotiating
power based on what volume bought. Some marketers are landing below N917. But
the vast majority of people who don’t enjoy the benefits of economies of scale
will land at significantly above that. What this teaches is that it is a free
and open market. It’s how you buy that you sell. There is no one price. It is a
function of the draft of the vessels that you land the product. It’s a function
of how much product was bought. It’s a function of what rate of exchange was
used to buy products. The exchange rate that we have used is the central bank
rate. So, if you have the central bank rate, then you will not land at that
price but if you to the black market, the price will be higher.
“The law says that we can only
keep 30 days of stock in our depots. So, the fact that the spot market has gone
up means nothing, because you are selling based on the price of the average
cost in your tank. The fact that the price has gone down to N971, it doesn’t
matter, because we are selling based on the average cost in your tank. How much
did you buy and the average cost of everything in the tank? It’s a market
price. And the market price is a range. It moves, depending on how efficient
you are. And I think for us, the most important thing is the exchange rate.”
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