NAIJA NEWS
Oil marketers have expressed mixed reactions to the recent requirement by the Dangote Petroleum Refinery that dealers must make advance payments before accessing products from its Lekki facility.
Naija News learnt that the announcement was made during a high-level stakeholder meeting chaired by NNPC Group CEO Mele Kyari and attended by representatives from the Major Oil Marketers Association of Nigeria, Depot and Petroleum Products Marketers Association of Nigeria, and key players from companies like 11 Plc, Matrix, and AA Rano.
Sources from the meeting revealed that Dangote required advance payments from marketers, departing from the usual system where payments are made after product delivery to 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.”
This policy has sparked debate among downstream operators, with ongoing negotiations aimed at resolving the disagreements.
Some marketers expressed concerns over the financial burden this system may impose, particularly on smaller businesses.
Others defended the policy, citing it as essential for the refinery’s smooth operation and a way to minimize risks from delayed payments.
In an interview with The PUNCH, the Independent Petroleum Marketers Association of Nigeria National Publicity Secretary, Chinedu Ukadike, acknowledged the advance payment directive and described it as reasonable for a newly established refinery.
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.”
In response to the situation, he explained that a special-purpose vehicle has been set up to facilitate financing for small, medium, and large-scale off-takers.
He added, “Because of the nature of independent marketers, we are now warehousing small, medium, and higher volume off-takers.