Attracted by the bulk-purchase agreement incentives offered by the Dangote Petroleum Refinery, more oil marketers in the country are jostling to be listed as beneficiaries of the agreement.
The petroleum marketers reasoned that the bulk-purchase agreement offers guaranteed price stability, as opposed to purchase from depot owners, whose prices are open to incessant upward review, as has just been announced.
Recall that two prominent players in Nigeria’s downstream oil and gas sector—Ardova Plc and Heyden Petroleum—entered into a bulk purchase agreement with the Dangote Petroleum Refinery after MRS, a situation they have leveraged to sell petroleum at a much cheaper pump price.
The depot owners recently raised their loading price to N950 per liter from N909, citing an increase in the price of crude oil in the international market. This has forced most independent marketers to raise their pump price, too, to reflect the depot owners’ new higher price.
The Independent marketers are referring to the benefits of the bulk-purchase agreement with Dangote Refinery as being enjoyed by the three leading oil marketers, MRS, Ardova Plc and Heydey who have entered into the purchase agreement with Dangote refinery and can retain their lower pump price.
The National President of the Independent Petroleum Marketers Association (IPMAN), Alhaji Abubakar Maigandi Garima, has confirmed that the association members are eager to sign on with Dangote Refinery and have been advised to do so by organizing themselves to pool resources and qualify for the bulk-purchase agreement.
Justifying IPMAN’s new position, he said members could not continue to depend on depot owners for products when they can buy directly from the refinery, bearing in mind that the minimum quantity to buy from Dangote Refinery is two million litres at N909 per litre.
The management of the Dangote Refinery, citing economic relief provided by President Bola Ahmed Tinubu’s crude-for-naira swap initiative, announced bulk-purchase offer incentives to the three leading downstream sector operators so that Nigerians could heave a sigh of relief at the reduced pump price.
As the MRS, Ardova Plc and Heyden keyed into the arrangement, other petroleum marketers besieged the Refinery in Ibeju-Lekki, Lagos, seeking to be part of the bulk purchase deal, which guarantees steady supply of petroleum products at competitive prices.
It was also gathered that motorists’ desire to be part of the bulk-purchase agreement was apparently being fueled by testimonies from motorists who have been praising the impressive burn rate of fuel sourced from Dangote Refinery and sold in MRS filling stations, which they said lasts longer compared to other products imported into the country and sold by others.
Dangote Refinery had said the strategic move was designed to further stabilise the nation’s fuel market and enhance energy security for consumers, as it would guarantee steady supply of petroleum products at affordable prices.
Ardova and Heyden’s bulk purchase agreement incentive followed a drop in the petrol pump price by the management of MRS Oil Nigeria Plc, which had previously entered into a similar agreement with Dangote Refinery.
As a result, MRS Oil lowered its fuel prices to N935 per litre across all its stations nationwide, addressing the long-standing issue of price disparities between states. Furthermore, MRS Oil’s stock surged to a new 52-week high recently, as investors became increasingly optimistic about the company’s future earnings prospects.
Reports indicate that the bulk purchase agreement with Dangote Petroleum Refinery had also enabled both Ardova and Heyden to secure a reliable and consistent supply of petroleum products from the world’s largest single-train refinery at competitive prices, benefiting consumers across the country.
The arrangement ensures that Ardova and Heyden will have access to a full range of refined products, thereby securing their operations with a reliable supply chain. Other petroleum markers, reports said, are keen on signing similar agreement with Dangote Refinery as soon as they are allowed to, as most of them have majority of their filing stations in Lagos close to Dangote Refinery.
It would be recalled that after signing the agreement, Ardova Plc, in a statement, underscored the importance of this agreement in fostering a more competitive environment within Nigeria’s downstream oil and gas sector.
The partnership with Dangote Refinery is poised to have a positive, transformative impact on Nigeria’s oil and gas market. By ensuring a stable and affordable supply of fuel products in the two companies’ over 1,000 retail outlets, the agreement will help alleviate the recurring issue of fuel scarcity that has long plagued Nigeria.
