Nigeria's downstream petroleum sector is being reshaped by deregulation, a new domestic refinery, and mounting foreign exchange pressure. Chinedu Ukadike, Public Relations Officer of the Independent Petroleum Marketers Association of Nigeria(IPMAN), tells Petroleumprice.ng that through every shift, one thing has not changed: independent marketers remain the backbone of fuel distribution in Nigeria, and the market cannot function without them.
With the emergence of the Dangote Refinery as a major domestic supplier, do you see this as a threat or an opportunity for independent marketers within IPMAN?
It is not a threat. It is a welcome development. The refinery has addressed the issue of product availability, which was always a problem. With its emergence, availability is no longer the primary concern, the focus now shifts to price. We hope the Dangote Refinery sustains operations so that petroleum prices come down and independent marketers can operate at greater volumes.
There are concerns that large integrated players could bypass independent depots and marketers. How is IPMAN engaging regulators to ensure fair access to product distribution channels?
There is no way you can bypass the independent marketer. IPMAN members control about 70 per cent of distribution facilities in Nigeria. We are the highest distributors of petroleum products in this country. There is no distribution channel in Nigeria where you will not find an independent marketer. It is not possible for any player to bypass us.
How severely has foreign exchange instability affected IPMAN members in terms of product importation, logistics costs, and station operations across Nigeria?
The dollar has direct and indirect effects. Once the dollar goes up, the price of petroleum products goes up, our costs go up, and demand is depleted. If prices climb too high, purchasing power drops and products cannot move. Dollar stability is directly tied to petroleum pricing stability in Nigeria.
What role should IPMAN play in preventing a potential distribution monopoly in Nigeria's downstream sector as local refining capacity increases?
The government must ensure local refineries are funded and given capacity to operate. If they are not, monopoly risk increases. But if local refineries operate freely, competition will drive prices down, IPMAN members will be able to buy, and that will sustain competition. Deregulation only works if independent marketers can respond freely to demand and supply.
Looking ahead, do you believe independent marketers will still be relevant in Nigeria's downstream sector five years from now, or is the market shifting toward refinery-controlled distribution models?
The market is shifting toward refinery-controlled distribution, that is a reality. But independent marketers will remain relevant. Even major players who attempted direct distribution had to return to independent marketers because they are not on the ground the way we are. In the next five years, we will move toward a more robust partnership model. Independent marketers will still be a significant force in stabilising the downstream market.