Marketers Abandon Other Fuel for Dangote’s as Depot Owners Increase Price
- Oil marketers are trying to benefit from the benefits offered by the Dangote Petroleum Refinery's bulk-purchase deal
- This comes after depot owners increased the ex-depot price of gasoline or premium motor spirit from N909 to N950 per litre
- To qualify for the bulk-purchase agreement from Dangote, marketers have been encouraged to pool their resources by organising collectively
Legit.ng journalist Zainab Iwayemi has 5-year-experience covering the Economy, Technology, and Capital Market.
Oil marketers are attempting to take advantage of the Dangote Petroleum Refinery's bulk-purchase agreement incentives after depot owners raised the ex-depot price of premium motor spirit (PMS) to N950 per litre from N909 per litre.
Source: UGC
Since the holiday season, the refinery has continuously supplied the product at N909 per litre, regardless of the increase in crude oil prices globally. The refinery has set the minimum amount of petrol that marketers can buy at two million litres.
Petroleum marketers appear to have shifted their focus to the Dangote Refinery, citing its guarantee of price stability compared to purchasing from depot owners, whose prices are frequently subject to upward revisions, as recently announced.
The Nation reported that this is because the depot owners based their price increase on the price of crude oil on the global market, which has forced the majority of independent marketers to raise their pump prices as well to reflect the new, higher price from the depot owners.
Other companies are following MRS
Following in MRS's footsteps, two companies in the nation's downstream oil and gas industry, Ardova Plc and Heyden Petroleum, recently entered into a bulk purchase arrangement with the Dangote Refinery, enabling them to sell gasoline at a significantly lower pump price.
According to Abubakar Maigandi, national president of the Independent Petroleum Marketers Association (IPMAN), the association's members are keen to join Dangote Refinery and have been encouraged to do so by pooling their resources to be eligible for the bulk-purchase agreement.
He stressed that since IPMAN can purchase goods directly from the Dangote Refinery, they can no longer rely on depot owners.
To help consumers, the Dangote Refinery's management made a bulk-purchase offer incentive to the three downstream sector players, noting the economic relief brought about by President Bola Tinubu's crude-for-naira swap plan.
According to Dangote Refinery, the strategic decision was intended to further stabilize the country's gasoline market and improve consumers' energy security by ensuring a consistent supply of petroleum products at reasonable costs.
Following a decrease in the petrol pump price by the management of MRS Oil Nigeria Plc, which had previously engaged into a similar agreement with Dangote Refinery, Ardova and Heyden offered an incentive for the bulk purchase agreement.
To address the long-standing issue of price discrepancies between states, MRS Oil reduced its fuel rates to N935 per litre across all its stations nationwide. Furthermore, as investors' confidence in MRS Oil's future profit potential grew, the company's shares recently surged to a new 52-week high.
According to reports, Ardova and Heyden secured a steady and reliable supply of petroleum products at low costs, thanks to the bulk-purchase arrangement with Dangote Petroleum Refinery, the world’s largest single-train refinery, benefiting consumers nationwide.
The arrangement secures Ardova and Heyden's operations with a dependable supply chain by guaranteeing access to a comprehensive array of refined products.
According to sources, other petroleum markers are eager to sign a similar agreement with Dangote Refinery as soon as they are permitted to do so because the majority of them have filing stations in Lagos adjacent to the refinery.
Dangote refinery’s operation crashes petrol importation
Legit.ng previously reported that the Organization of the Petroleum Exporting Countries (OPEC) stated that the Dangote Petroleum Refinery and its initiatives to increase petrol production were affecting the European PMS market.
Years after the nation had been entirely dependent on imports for its petroleum needs, the 650,000-capacity Dangote refinery, which started operations in January 2024, began generating PMS in September.
According to an OPEC report released on Wednesday, January 15, 2025, the establishment of the Dangote refinery has decreased Nigeria's importation of petroleum products from Europe. Since it began operations, the refinery has exported gasoline, diesel, and aviation fuel to nations both inside and outside Africa.
Proofreading by James, Ojo Adakole, journalist and copy editor at Legit.ng.
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