ABUJA, Nigeria (VOICE OF NAIJA)-Oil marketers have voiced mixed reactions to the Dangote Petroleum Refinery’s recent requirement for dealers to make advance payments before lifting products from its Lekki facility.
The policy was introduced during a high-level stakeholder meeting in Abuja, convened by NNPC Group CEO Mele Kyari.
The meeting included representatives from the Major Oil Marketers Association of Nigeria, the Depot and Petroleum Products Marketers Association of Nigeria, and key players such as 11 Plc, Matrix, AA Rano, and the Nigerian Midstream and Downstream Petroleum Regulatory Authority.
Sources at the meeting revealed that Dangote Petroleum Refinery emphasized the need for upfront payments, deviating from the traditional importation model where marketers typically pay after products arrive at depots.
The source said, “Paying upfront significantly increases financial pressure on marketers, particularly those with limited capital. For decades, we’ve operated on a post-delivery payment model, which aligns better with our liquidity cycles.”
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The issue has sparked ongoing disagreement among downstream operators, with negotiations continuing to find a mutually agreeable solution.
In separate interviews with our correspondent, marketers shared differing opinions on the matter.
Some expressed concerns about the financial strain this requirement could place on smaller businesses, while others supported the policy, arguing that it is a necessary measure to ensure smooth refinery operations and reduce the risks of delayed payments.
In an interview with The PUNCH, National Publicity Secretary of the Independent Petroleum Marketers Association of Nigeria, Chinedu Ukadike, confirmed that marketers are required to make advance payments before off-taking products.
He explained that the rationale behind the directive is understandable, given that the refinery is a new establishment, and such credit facilities should only be extended once solid relationships are established.
He said, “The Dangote refinery is just newly established and they are building a customer base for those who can offtake high volumes.
“Independent marketers are ready to offtake higher volumes but because of some of the largesse we have been receiving before, we also want somewhere we can be getting the products and maybe pay later.
“Dangote is demanding advance payment but since it’s just an expanding business. I know that with time when we create a relationship with Dangote, we will be able to get products on credit.”
When asked about the association’s response to the situation, he revealed that a special purpose vehicle has been set up to provide financing for small, medium, and large volume off-takers.
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He added, “Because of the nature of independent marketers, we are now warehousing small, medium, and higher volume off-takers.
“So that is why we were able to assemble our marketers and establish special purpose vehicles to be able to drive in all the marketers to at least get petroleum products from the new arrangement.
“We have agreed with the advanced payments, and we are making necessary contacts with financial stakeholders and some of our marketers to ensure that we can get products. I believe that with time, we will start getting concessions and other minimal support in terms of logistics.”
Another marketer, speaking on the condition of anonymity, revealed that discussions regarding the payment are still ongoing and have not yet been finalized.
“Those are subject to private confidential businesses. Everybody knows that if you want to buy the product, you have to pay, but we can’t discuss that now. Those are still part of the issues that we need to thrash in our discussions and things we want to talk about but not now. Let us conclude the negotiations on all sides,” the official said.
President of the Petroleum Products Retail Outlet Owners Association of Nigeria, Dr. Billy Harry stated that marketers and NNPCL have collectively agreed to halt petrol imports.
He also mentioned that his members are actively working to secure the necessary funds.
“At least we have gotten to the point where we have agreed that we are no longer importing fuel. We have agreed that we are not importing. Every other thing that would make the business stable is what PETROAN is after and pursuing. We encourage all stakeholders and Nigerians to be patient with what NNPCL, Dangote, and the NMDPRA are doing.
“We have been getting products on advance payment so it’s not entirely new. It has always been like that. And that was why we asked for N100bn intervention funds. That would help in cushioning the effect of bank charges.
“Today, most of us are working assiduously to get money from banks that won’t charge us for transactions and different things. That’s where we are. We are positive the discussion will end well.”