Oil marketers at the weekend struck a deal with the $20 billion Dangote refinery for the supply of at least 28 million litres of petrol daily in the next six months for domestic consumption.
The development came amid an announcement by the refinery that it had cut ex-depot petrol price from N990 per litre to N970 per litre, saying it is its own way of thanking Nigerians for their support.
A stakeholders’ meeting at the weekend in Abuja resolved that oil marketers will henceforth cease importation of products. It stressed that if they must bring in new stock, it would be dependent on the unavailability of products from Dangote refinery.
Confirming the new agreement in a statement in Abuja, petrol retailers under the Petroleum Products Retail Outlets Owners Association of Nigeria (PETROAN), said the deal was expected to bring succour to Nigerians.
A release by the organisation’s spokesman, Dr Joseph Obele, said other stakeholders that signed the deal included Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA), Nigerian National Petroleum Company Limited (NNPC), and Edo Refinery.
Others were Dangote Refinery, Waltersmith Refinery, Aradel Refinery, and Independent Petroleum Marketers Association of Nigeria (IPMAN), among others.
The oil and gas sector players said henceforth they would purchase all their petroleum products from Dangoted refinery located in the outskirts of Lagos. They lauded all stakeholders that contributed to the agreement.
“The resolution includes Dangote refinery guaranteeing to sell an average of 28,000,000 litres of Premium Motor Spirit (PMS) daily for the next six months to oil marketers for domestic consumption in the Nigerian market,” PETROAN stated.
It quoted National President of PETROAN, Dr Billy Gillis-Harry, as expressing the view that the resolution will bring succour to the downstream sector and improve the Nigerian economy.
It added that the resolution will attract many benefits, including stability of petroleum products supply, control of price fluctuations, transparent communication, addressing of conflicts proactively, and fostering of collaboration among key players.
According to the new deal, the availability of aviation fuel and diesel from all domestic refineries would be afforded NMDPRA for the same period of six months and must be subject to consideration for import as may be required.
The downstream regulator, NMDPRA, it was learnt, must also establish the basis for allocating import volumes to oil marketing companies on the assumption of the aggregate of domestic refineries’ capacity, with the understanding to cover shortfalls for respective marketers.
PETROAN said with the resolution, the domestic refineries would provide fixed quantities and delivery windows, which must be a period of two months preceding the month of delivery to the customer and NMDPRA.
Besides, individual oil marketing companies were to enter direct commercial agreements with domestic refineries on a willing buyer and willing seller basis, the petrol retailers added.
There had been a back and forth between the government, the management of Dangote refinery, oil marketers, and other stakeholders, as some downstream industry players previously raised concerns about Dangote refinery’s capacity to reliably supply the market and maintain consistent distribution across Nigeria’s expansive network.
Marketers also questioned whether the refinery’s production and logistic systems were adequately prepared to handle the country’s fluctuating demand, a poser that Dangote had now dispelled as unnecessary.
