Marketers have expressed different opinions on the recent demand by the Dangote Refinery for advance payments before product liftingThe marketers disclosed that the new demand would put financial pressure on them, contrary to the previous arrangement of paying after product deliveryThe refinery had further crashed petrol prices, lower than the one sold by the refurbished Port Harcourt Refinery
Henzodaily.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Oil Marketers have expressed different opinions on the recent demand by the Dangote Refinery, requiring dealers to make advance payments before lifting products from the facility.
The demand came amid a high-level stakeholders meeting organised by Mele Kyari, the Group CEO of the Nigerian National Petroleum Company Limited (NNPC).
Dangote Refinery demands down payments from marketers before product lifting
Credit: Bloomberg/Contributor
Source: UGC
Dangote insists on advance payments for products
Representatives of the Major Energy Marketers Association of Nigeria (MEMAN) and the Depot and Petroleum Products Marketers Association of Nigeria (DAPAMAN) attended the meeting.
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Other critical stakeholders at the meeting are oil companies such as 11 Plc, Matrix, AA Rano, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority (NMDPRA).
Punch quotes sources at the meeting as saying that the mega Dangote Refinery insisted on advance payments from marketers, contrary to the traditional importation system, in which marketers settle payments after products arrive at depots.
Marketers expressed concerns over new condition
The marketers disclosed that paying upfront will increase financial pressure on them, especially those with limited capital. They stated that they have operated on a post-delivery payment system, which aligns better with their liquidity cycle.
The issue has caused disagreement among downstream industry players as negotiations are ongoing to reach a mutual agreement.
Henzodaily.ng earlier reported that the Dangote Refinery further crashed its petrol prices from N990 to N970 per litre, which marketers say is far better than the one sold by the refurbished Port Harcourt refinery.
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While some marketers expressed worry about the financial implications, others defended the policy, stating that ensuring the refinery runs smoothly and mitigates risks is essential.
The national publicity secretary of the Independent Petroleum Marketers Association of Nigeria (IPMAN), Chinedu Ukadike, disclosed that marketers were asked to pay in advance.
Industry players weigh new condition
He said the reason for the new demand is understandable, as the refinery is a new establishment that needs to forge relationships with marketers before granting any credit facility.
He disclosed that IPMAN established a particular purpose vehicle (SPV) through which members can off-take products from the refinery and provide financing for small, medium, and big players.
Billy Gillis-Harry, president of the Petroleum Products Retail Outlet Owners Association of Nigeria (PETROAN), noted that marketers and the NNPC have agreed to end petrol imports.
He said that PETROAN members are working to raise money as required by the Dangote Refinery.
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Marketers expect December drop after Dangote slashes prices
Henzodaily.ng earlier reported that Petroleum marketers were predicting a drop in petrol prices of between N900 and N1,000 per litre by Christmas after the Dangote Refinery announced a decrease in the cost of its products.
This is according to Petroleum Products Retail Outlets Owners Association (PETROAN) officials and the Independent Petroleum Marketers Association of Nigeria (IPMAN).
The latest projections come amid a November 24, 2024, petrol price slash by the Dangote Refinery, reducing the ex-depot price from N990 p/litre to N970.
Proofread by Kola Muhammed, journalist and copyeditor at Henzodaily.ng
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