In a significant resolution for Nigeria’s fuel distribution landscape, the Nigerian National Petroleum Company Limited (NNPC) has agreed to sell Premium Motor Spirit (PMS), or petrol, to the Independent Petroleum Marketers Association of Nigeria (IPMAN) at N995 per litre. This agreement follows the intervention of the Department of State Services (DSS), which stepped in to resolve the ongoing dispute between NNPC and IPMAN.
Hammed Fashola, National Vice President of IPMAN, confirmed the breakthrough, crediting the DSS for addressing key concerns faced by marketers. Among these concerns was the issue of outstanding payments. Through the DSS intervention, the Nigerian Midstream and Downstream Petroleum Regulatory Authority has also agreed to settle a N10 billion debt owed to IPMAN, while paving the way for independent marketers to purchase petrol directly from the Dangote Refinery.
“We appreciate their intervention,” Fashola said, highlighting that the DSS played a crucial role in brokering peace and fostering understanding between both parties. With the new agreement, IPMAN members can now buy PMS at N995 per litre, a move expected to stabilize the disparity in fuel pricing across the country.
Impact on Petrol Pricing
With NNPC offering petrol at N995 per litre, Fashola assured that IPMAN members would no longer be forced to sell petrol at exorbitantly higher prices than those of major marketers. However, he noted that factors such as transportation costs still influence the final price, especially for stations located far from the major depots.
In some locations, independent marketers have been selling petrol for as high as N1,200 per litre, but Fashola expects that with the new pricing structure, there will be a slight reduction. “We want to work on that because we want to have a common ground,” he stated. IPMAN is now evaluating transportation costs to create a more uniform pricing system across the country.
One of the major challenges IPMAN has faced in recent months is the price disparity between independent marketers and major marketers like NNPC Retail. This gap has led to long queues at petrol stations in cities, as consumers flock to stations selling at lower prices. Fashola explained that these queues are not due to a shortage of fuel but rather the difference in prices between independent and major marketers.
To address this, IPMAN aims to eliminate the price gap and restore balance in the market. “The lack of direct supply has been our problem, and now that we are solving that problem, I don’t think that disparity will be there again,” Fashola said.m
Another positive outcome of the DSS intervention is the green light for independent marketers to buy petrol directly from local refineries, including the Dangote Refinery. Fashola revealed that IPMAN plans to meet with Dangote Refinery officials soon to finalize the logistics of direct purchases, which would offer a more competitive option for marketers.
While IPMAN is excited about this new opportunity, Fashola emphasized that the association remains open to doing business with the NNPC, stating that their decision will be based on which supplier offers the best price. This flexibility is crucial as the association seeks to maintain competitive prices for consumers.
Earlier, IPMAN’s National President, Abubakar Maigandi, expressed concerns over the price differential between what NNPC pays for petrol from the Dangote Refinery and what it charges independent marketers. According to Maigandi, NNPC buys petrol from Dangote at N898 per litre but sells it to marketers at N1,010 in Lagos and even higher in other locations like Calabar, Port Harcourt, and Warri. This price hike led IPMAN to threaten a shutdown of operations until the issue was resolved.
With the new N995 per litre agreement, IPMAN hopes to mitigate these price discrepancies and ensure a more stable and equitable distribution of petrol across the country. As the association controls over 70% of Nigeria’s filling stations, this agreement is expected to have a far-reaching impact on fuel availability and pricing nationwide.
This new pricing agreement represents a significant step forward for Nigeria’s petroleum sector. By resolving outstanding payment issues, securing access to local refinery supplies, and narrowing the price gap, IPMAN is set to enhance its competitive edge while ensuring more stable fuel prices for consumers. As the country continues to navigate the post-subsidy era, the collaboration between key players like NNPC, IPMAN, and Dangote Refinery will be crucial in shaping the future of fuel distribution in Nigeria.