Petrol prices expected to drop as a result of agreement between Ipman and Dangote refinery

NIGERAN petrol prices are expected to fall over the coming days as a result of a decision by the Independent Petroleum Marketers Association of Nigeria (Ipman) to commence the direct sale of produce from the Dangote refinery to members of the public.

Over recent months, petrol prices have kept rising across Nigeria, having a knock-on effect on everything else, especially transport and food costs. To address the problem, the federal government has brokered a deal between Ipman and the Dangote refinery to sell produce directly to the public, in the hope that the increased supply will force prices down.

James Tor, the Ipman general secretary, explained that as a result of the new development, Nigerians will experience a drastic reduction in the price of petrol and a boost in the products’ availability nationwide. He added that the agreement would make the pump price of petrol at independent marketers’ retail outlets drop below N1,150 per litre.

Mr Tor said: “If the business agreement kicks off, you will see a drastic reduction in the price of gasoline. For obvious reasons, it will lead to easy availability of the product and price factor.

"We are the major stakeholders who have filling stations across the country. The price of petrol in our filling station will go much below N1,150 in our retail outlets depending on what Dangote Refinery agreed to give to us.”

This agreement between Ipman and the 650,000 barrels per day Dangote refinery brings an end to the middleman posture played by the Nigerian National Petroleum Company (NNPC) on the inaugural lifting of Dangote petrol on September 16, 2024.  As a result, of the direct sale agreement, petrol marketers have dumped imported fuel for Dangote petrol.

Anthony Chiejina, a spokesperson for the Dangote Group, confirmed that Ipman and Dangote refinery have agreed on the direct sale of petrol. This comes after the Nigerian government announced that the NNPC will no longer be the sole off-taker of Dangote petrol, which is part of the implementation of the naira-for-crude deal.

The naira-for-crude implementation committee led by the finance minister Wale Edun, permitted petrol marketers to lift Dangote petrol on October 11, 2024.  Last week, the Dangote refinery revealed that its gasoline is sold at N960 and N990 per litre for ships and trucks but earlier on, Ipman had insisted that imported fuel is cheaper than Dangote’s petrol.

However, petrol landing cost dropped to N971 per litre in November 2024, according to the Major Energies Marketers Association. Despite this, Nigerians buy petrol between N1,060 and N1,200 at filling stations across the country but with the Ipman and Dangote Refinery direct sale agreement, Nigerians are likely to buy petrol at about N1,060 per litre price or below.

Over the last two months, the price of petrol had doubled to between N1060 and N1,200 from N617 per litre traded in August 2024. This hike in energy costs directly affects Nigeria’s inflation, which stood at 32.7% in September 2024.