Amid persistent volatility in Premium Motor Spirit (PMS) prices, the Independent Petroleum Marketers Association of Nigeria is set to seek a credit facility to establish a proposed $10 billion refinery.
The move follows recent price adjustments by the Dangote Petroleum Refinery and Petrochemicals, which has altered petrol prices three times this year.
The 650,000 barrels-per-day refinery’s price changes, largely driven by fluctuations in global crude oil prices, have left independent marketers grappling with uncertainty, losses, and operational challenges.
Speaking on the development, IPMAN National President, Abubakar Maigandi, said the association’s long-term solution to the volatility is to build and operate its own refinery.
He described financial constraints as the major hurdle delaying the take-off of the proposed 300 barrels-per-day plant.
According to Maigandi, the project, named IPMAN Refinery and Petrochemicals Company, is proposed to be located in Akwa Ibom State.
He disclosed that the association plans to present its proposal and request for a credit facility to President Bola Ahmed Tinubu in March.
“The Independent marketers are to seek the support of the government to build their own refinery. We have already perfected our proposal that we are presenting to the President in March,” Maigandi said.
He added that once the loan is secured — which may involve equity participation — the project could be completed within one year.
IPMAN’s move comes after the Nigerian National Petroleum Company Limited ended its role as sole importer of PMS following the removal of fuel subsidy.
Meanwhile, the Port Harcourt Refinery and Petrochemicals Company and Warri Refinery and Petrochemicals have remained shut down, increasing reliance on private supply and imports.
According to recent data from the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Dangote Refinery supplied 40.1 million litres out of the 63 million litres of domestic petrol consumption, while the remaining 23 million litres was sourced from imports, as modular refineries lack PMS production capacity.
Maigandi also confirmed that independent marketers have started lifting petrol from Dangote Refinery. However, he noted that marketers currently obtain supplies indirectly through MRS Oil Nigeria Plc.
He explained that since Dangote Refinery has not commenced free direct delivery to independent marketers as earlier promised, they still incur transportation costs from MRS depots to their retail outlets.
“We cannot sell at the same pump price as MRS because Dangote Refinery is not delivering the petrol to us directly as planned. We have been getting it indirectly from MRS, and we still spend money to take it to our stations, so we can’t compete with MRS, which is our supplier,” he said.
Industry analysts say the proposed IPMAN refinery could, if realised, enhance competition and reduce marketers’ exposure to price shocks in Nigeria’s deregulated petrol market.
