The Independent Petroleum Marketers Association of Nigeria (IPMAN) has stated that the price of petrol will determine whether it buys from the Nigerian National Petroleum Company (NNPC) Limited or Dangote Petroleum Refinery.
In an interview with Punch on Monday, Ukadike Chinedu, IPMAN’s national publicity secretary, explained that the association is open to purchasing from either supplier based on which offers a more competitive price.
“Now that NNPC has said they are not the sole off-taker of Dangote petrol, it means the price of the product will determine where we buy it. If NNPC imports petrol at a cheaper price than Dangote, we will buy from NNPC,” Chinedu said.
He noted that the situation reflects the government’s implementation of the Petroleum Industry Act (PIA) and the removal of the petrol subsidy, allowing market forces to determine prices. According to him, this competition will eventually lead to lower prices.
National President of IPMAN, Abubakar Maigandi has initiated talks with investors and foreign partners to explore importation options if imported petrol proves to be more affordable.
“We are discussing with foreign partners because independent marketers are the largest buyers of diesel from the Dangote refinery, controlling about 80 percent of filling stations nationwide,” Chinedu added. “So, if Dangote’s petrol is cheaper, we will buy it, but if importation is more cost-effective, we will go for that.”
Similarly, Mustapha Zarma, IPMAN’s national operations controller, stated that while they haven’t yet contacted Dangote Refinery’s sales department regarding prices, they plan to do so soon.
‘Decision to Buy from NNPC or Dangote Depends on ROI’
Zarma emphasised that the decision to purchase from Dangote or NNPC will be based on which supplier offers a better return on investment and profit margins.
“We may contact the refinery’s sales department this week to find out the price,” Zarma said. “If the price is competitive enough to provide a good return on investment and the required margin, we won’t hesitate to buy from Dangote to complement what NNPC is supplying.”
He added that whichever option proves cheaper, whether Dangote’s petrol or imports, will attract buyers, helping to prevent a price monopoly.
“This competition will prevent price monopoly, allowing market forces to determine local prices for refined petroleum products, just as is happening with diesel now,” Zarma explained. “This will create equilibrium in pricing and ensure sustainable supply.”
On September 7, NNPC refuted claims that it intended to become the sole distributor of Dangote Refinery’s products. The company clarified that both Dangote Refinery and any other domestic refineries are free to sell to marketers on a willing buyer, willing seller basis, and that domestic refining does not guarantee lower prices compared to global parity pricing.
