The Independent Petroleum Marketers Association of Nigeria (IPMAN) has expressed strong support for the ongoing crude-for-Naira arrangement between the Nigerian National Petroleum Company (NNPC) and Dangote Refinery, emphasising that the scheme will significantly ease the economic burden on Nigerians. This initiative, which involves exchanging crude oil for refined products such as Premium Motor Spirit (PMS), is part of the government’s strategy to stabilise the fuel market and reduce dependence on foreign imports.
In an exclusive interview during the latest edition of IPMAN Today, the association’s president, Alhaji Abubakar MAigandi Garima, highlighted the importance of the arrangement, noting its potential to benefit consumers by making PMS more affordable. The initiative, introduced under President Bola Ahmed Tinubu’s administration, is part of a broader economic policy aimed at easing pressure on the Naira and ensuring a steady domestic supply of petroleum products.
The IPMAN President hailed the programme as a “welcome development” for Nigeria’s energy sector. He explained that, previously, the country relied heavily on importing refined petroleum products in foreign currencies, particularly the US dollar, which has placed immense pressure on the Naira. With the new framework, crude oil is exchanged with Dangote Refinery in Naira, helping to preserve Nigeria’s foreign reserves and reduce volatility in the local currency.
“The crude-for-Naira swap is a brilliant move. It will ensure that refined petroleum products are more available nationwide, reducing sourcing and importation costs. More importantly, it eliminates the need to purchase US dollars, which has long placed undue pressure on the Naira,” Garima explained. He further noted that, as marketers begin purchasing PMS from Dangote Refinery in Naira, consumers should expect a gradual reduction in fuel prices, particularly if the Naira strengthens against the dollar.
Garima tempered expectations, acknowledging that the pricing effects may not be immediate. He noted that while currency pressures would ease, it might take some time before fuel prices significantly decrease. However, he was confident that, as demand for foreign exchange in the energy sector lessens, the Naira will strengthen, leading to a corresponding drop in the cost of refined products.
“This won’t happen overnight, but eventually, we will start seeing prices come down,” he remarked. “When the Naira appreciates, the price of PMS will decrease, and the people will feel the relief.”
In response to recent media reports suggesting that NNPC would no longer be the sole purchaser of refined PMS from Dangote Refinery, the IPMAN president clarified that the national oil company still retains exclusive rights to the product, at least for now. However, he expressed optimism that this exclusivity would eventually end, allowing independent marketers to buy directly from the refinery.
“As it stands, NNPC remains the sole purchaser, but we anticipate that Dangote Refinery will soon allow marketers like us to lift the product directly. Our concern is that NNPC doesn’t force us to rely on private depots, which often drive up costs,” he said.
The discussion also touched on Nigeria’s push to promote Compressed Natural Gas (CNG) as a cleaner, cheaper alternative to PMS. President Tinubu’s administration has been increasing efforts to encourage the use of CNG, with vehicle conversion schemes already in place. The government has begun distributing free kits to help Nigerians switch from petrol to CNG.
“CNG is the answer,” the IPMAN president declared emphatically. “It’s not only cheaper, but vehicles running on CNG last longer than those using PMS. It will reduce fuel costs and lower carbon emissions. This is the future for Nigeria.”
He highlighted that Nigeria’s abundant natural gas reserves make the country well-positioned to benefit from a transition to CNG. IPMAN has been urging its members to invest in infrastructure to support this shift, such as establishing CNG combustion centres at filling stations.
The association is also working closely with state governments to expand the necessary infrastructure for CNG usage across the country. IPMAN has been engaging with governors to ensure filling stations are equipped with conversion centres where motorists can easily switch to CNG.
“We’re actively working with state governments to set up CNG combustion centres at key locations,” Garima shared. “It’s crucial that motorists have easy access to these centres, and we’re already seeing support from various states.”
In conclusion, the IPMAN president expressed optimism about the future of Nigeria’s energy sector, both with the crude-for-Naira swap and the shift towards CNG. He urged Nigerians to remain patient as the government implements these reforms, confident that these initiatives would provide long-term relief from high fuel costs and contribute to the country’s energy security.
“Let’s support the government,” he said. “All indications point to a prosperous future. These policies will not only make fuel more affordable but also position Nigeria for a brighter energy future.”
