Mixed reactions to Dangote refinery’s advance payment rule
Oil marketers have reacted differently to the new policy introduced by the Dangote Petroleum Refinery, which mandates advance payments from dealers before accessing products at its Lekki facility.
Gistreel gathered that the announcement was made during a high-level stakeholder meeting led by NNPC Group CEO Mele Kyari.
The meeting included representatives from the Major Oil Marketers Association of Nigeria, Depot and Petroleum Products Marketers Association of Nigeria, and major companies such as 11 Plc, Matrix, and AA Rano.
According to sources present, Dangote’s advance payment policy marks a shift from the traditional practice of allowing payments 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.”
