IPMAN: Fuel Pricing to Be Driven by Competition Between NNPC and Dangote Refinery
The Independent Petroleum Marketers Association of Nigeria (IPMAN) has indicated that the price of petrol will determine whether its members purchase from the Nigerian National Petroleum Company (NNPC) or Dangote Refinery. According to Ukadike Chinedu, the National Publicity Secretary of IPMAN, marketers will seek the most cost-effective source as competition between local suppliers sets in.
“Now that NNPC has said they are not the sole off-taker of Dangote petrol, it then means that the price of the product would determine where we are going to buy it. If NNPC imports the product and its price is cheaper than that of Dangote, we will buy from NNPC,” Chinedu stated.
His comments came after NNPC clarified its position, noting that it is not the exclusive buyer of Dangote’s petroleum products, thus providing flexibility for dealers to choose between suppliers based on pricing. Chinedu noted that this development underscores the implementation of the Petroleum Industry Act (PIA) and the removal of fuel subsidies, which now allow the price of petrol to be dictated by market forces.
Chinedu also highlighted the recent competition within the diesel market as an example. “When diesel prices rose to N1,600/litre, Dangote entered the market with a lower price of N1,200/litre, prompting importers to reduce their prices to around N1,100/litre. This competition brought prices down to between N950 and N1,100,” he explained. He expects a similar competitive dynamic to play out in the petrol market, driving prices lower.
Speaking on behalf of IPMAN’s leadership, Chinedu noted that the group is in talks with foreign investors to secure funding and capitalize on the opportunities within the market. “Independent marketers, who control about 80% of the filling stations nationwide, are the biggest buyers of diesel from Dangote Refinery. If Dangote’s PMS (petrol) is cheaper, we will buy from him, but if importation proves more cost-effective, we will go for that option,” he said.
In line with this, Mustapha Zarma, the National Operations Controller of IPMAN, stated that while they have yet to contact Dangote Refinery regarding petrol pricing, they plan to reach out soon. “If the price is competitive enough for one to buy and get a return on investment, we wouldn’t mind purchasing directly from him to complement what NNPC is bringing in,” Zarma said.
He emphasized that competition will drive prices down, ensuring a sustainable supply of petroleum products in Nigeria. Zarma added, “I don’t think the government will allow price monopoly. They would want a competitive market where the laws of demand and supply would determine the local price of refined petroleum products, just like diesel is right now.”
As Nigeria continues to adjust to the new fuel pricing regime, IPMAN remains focused on ensuring that its members take advantage of the competitive environment to provide Nigerians with affordable fuel options.
