Dangote Refinery, Marketers to Discuss Direct Petrol Lifting and Potential Price Reductions in Upcoming Meeting

The Dangote Refinery, Africa's largest, built at a cost of $20 billion by Aliko Dangote on the outskirts of Lagos, is set to play a pivotal role in Nigeria's energy sector. Capable of producing 650,000 barrels of fuel per day, the refinery aims to meet 100% of Nigeria's oil needs and generate surplus for export.

As Nigeria grapples with persistent fuel shortages, the Independent Petroleum Marketers Association of Nigeria (IPMAN) has expressed optimism about lifting premium motor spirit (petrol) directly from the Dangote Refinery.

A crucial meeting between IPMAN members and Dangote Refinery officials is scheduled for this week to discuss direct petrol lifting and price reduction. Chief Chinedu Ukadike, IPMAN's Public Relations Officer, highlighted the significance of this meeting, stating, "We are happy that Dangote has set on a new course in terms of looking to other stakeholders to distribute its products." He added that the refinery's move to distribute through coastal areas using vessels could eliminate the "ghost scarcity" that has plagued the country.

Pricing remains a critical issue, with independent marketers needing to lift petrol at competitive rates. Currently, major marketers receive supplies at N766 per litre, a price deemed unsustainable by Chief Ukadike. He emphasized that "supply will determine price," and as deregulation fosters competition, increased supply within the country should drive prices down.

The meeting will also address the broader implications of price reductions, which can lead to increased demand but may erode profit margins and necessitate higher sales volumes to maintain profitability. The discussions aim to ensure that resources are allocated effectively, and any new problems or issues are promptly addressed.