The Independent Petroleum Marketers Association of Nigeria (IPMAN) has announced that the price of petrol will dictate whether it purchases fuel from the Nigerian National Petroleum Company (NNPC) Limited or Dangote Petroleum Refinery.
Ukadike Chinedu, the national publicity secretary of IPMAN, made this statement in an interview with Punch on Monday.
Chinedu explained that the recent clarification from NNPC—that it is not the sole off-taker of Dangote products—means that marketers now have the option to choose the cheaper supplier.
“Now that NNPC has said they are not the sole off-taker of Dangote petrol, it means that the price of the product would determine where we are going to buy it,” Chinedu said.
“If NNPC imports the product and its price is cheaper than that of Dangote, we will buy from NNPC.”
Chinedu also noted that this situation reflects the implementation of the Petroleum Industry Act (PIA) and the government’s removal of petrol subsidy.
With the subsidy gone, petrol prices are now determined by market principles of demand and supply.
Chinedu believes that increased competition between NNPC and Dangote will eventually lead to lower prices for consumers.
In response to questions about potential imports if prices are more affordable, Chinedu revealed that IPMAN is already in discussions with investors.
Abubakar Maigandi, IPMAN’s national president, is leading talks to secure funding based on current market trends.
“We are talking with some foreign partners because independent marketers are the largest buyers of diesel from Dangote refinery,” Chinedu explained.
“We control about 80 percent of the filling stations nationwide.”
Chinedu emphasized that if Dangote’s petrol is cheaper, IPMAN will purchase it. Conversely, if imported petrol proves to be more economical, they will opt for that.
Mustapha Zarma, the national operations controller of IPMAN, added that the association has not yet contacted Dangote refinery’s sales department but plans to do so soon.
“The decision to buy from Dangote or NNPC will be based on which supplier offers a better return on investment and required margins,” Zarma said.
He further explained that IPMAN would analyze the prices offered by Dangote and compare them with those of imported petrol.
“If the price is competitive enough for one to buy and get a return on investment and the required margin, then we wouldn’t mind purchasing directly from Dangote,” Zarma said.
He stressed that competition in the market is essential to prevent price monopolies and ensure that local prices are determined by supply and demand.
“That will bring about competition, and I don’t think the government will allow price monopoly,” Zarma said.
He believes that a competitive market will result in stable prices and a reliable supply of refined petroleum products.
On September 7, NNPC denied reports that it intended to become the sole distributor for Dangote refinery.
The company clarified that there is no guarantee that domestic refining would result in lower prices compared to global parity pricing.
NNPC stated that Dangote refinery and other domestic refineries are free to sell directly to any marketer based on a willing buyer, willing seller basis.
