Dangote Refinery to Supply 240 Million Litres of Petrol Monthly to Independent Marketers

The Dangote Petroleum Refinery has signed a groundbreaking agreement with the Independent Petroleum Marketers Association of Nigeria (IPMAN) to supply 60 million litres of Premium Motor Spirit (PMS), commonly known as petrol, weekly.

This translates to a total of 240 million litres of petrol every month for distribution across Nigeria.

This strategic deal, which is expected to commence before the end of November, follows discussions between the two parties aimed at enhancing fuel supply and distribution in the country, while also reducing the dependency on imported refined products.

According to IPMAN’s National Publicity Secretary, Chinedu Ukadike, the agreement will empower the association to directly lift PMS from the Dangote refinery without intermediaries, ensuring that independent marketers, who already control a large share of fuel distribution in Nigeria, can distribute the product efficiently nationwide.

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“We are going to off-take the product in millions of litres. Before now, most of the imported products in Nigeria were distributed through IPMAN. So we can off-take the products, no matter the millions of litres that are produced,” Ukadike stated. He further emphasized that independent marketers can take a minimum of 10 million litres, and the Dangote refinery will offer up to 60 million litres weekly based on market demand.

The deal comes at a time when the deregulation of Nigeria’s downstream oil sector is pushing fuel prices lower due to increased competition. Prices of petrol have already dropped by approximately N10 to N15 per litre in various regions as marketers prepare for the shift to direct sourcing from Dangote.

Ukadike added, “By just the announcement that IPMAN and Dangote have met and are ready to transact business, the prices of products have crashed. Independent marketers are no longer buying from middlemen. We are going to be buying directly from the producer.”

The new supply arrangement is expected to ease logistical challenges faced by marketers and reduce fuel scarcity, especially in remote areas, as IPMAN members are now set to be major distributors of petrol and other refined products across the country.

However, while IPMAN celebrates the deal, some challenges remain in the sector. The Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA) has yet to settle an outstanding N10 billion Petroleum Equalisation Fund owed to IPMAN members.

This fund was designed to offset the transport costs of distributing fuel at uniform prices across Nigeria, but its payment has been delayed, leaving many marketers in financial distress.

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Ukadike called on the NMDPRA to expedite the payment of the N10 billion, citing the urgent need for independent marketers to pay off loans and maintain stable operations in the face of the evolving market conditions.

The Dangote refinery, which began producing petrol in September 2024, is also looking to increase its output.

Aliko Dangote’s conglomerate is in talks with commercial lenders and other stakeholders to raise funds to secure the necessary crude oil supply for the refinery to reach its full capacity of 650,000 barrels per day, according to sources familiar with the discussions.