The Dangote Petroleum Refinery has signed a bulk purchase agreement with Ardova Plc and Heyden Petroleum, two major companies in Nigeria’s downstream oil and gas industry, driven by the financial relief offered by President Bola Ahmed Tinubu’s crude-for-naira swap proposal.
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This calculated action aims to further stabilise the country’s gasoline market and improve consumers’ energy security by guaranteeing a consistent supply of petroleum products at reasonable costs. The precedent set by MRS Oil Nigeria Plc, which had previously signed a comparable contract with Dangote Refinery, is being followed by this development.
In order to solve the long-standing problem of price differences between states, MRS Oil recently reduced its fuel rates to N935 per litre across all of its stations nationally. Additionally, as investors grew more hopeful about MRS Oil’s prospects for future profitability, the company’s shares shot up to a new 52-week high last Friday. According to reports, Ardova and Heyden will be able to secure a steady supply of petroleum products from the largest single-train refinery in the world through the bulk purchase agreement with Dangote Petroleum Refinery.
This will benefit consumers nationwide by guaranteeing a steady supply of fuel at competitive prices. By guaranteeing Ardova and Heyden access to a comprehensive array of refined products, the arrangement secures their operations with a dependable supply chain. The significance of this deal in creating a more competitive atmosphere in Nigeria’s downstream oil and gas industry was emphasised in a statement released by Ardova Plc. Although Ardova has been a significant off-taker from the Dangote Refinery since its founding, it is anticipated that this new structure would formalise and fortify the two businesses’ collaboration, resulting in long-term advantages for both.
Under this arrangement, Ardova Plc will be able to purchase all of the refinery’s petroleum products. “This new framework will institutionalise a more robust relationship between the two companies to further enhance the emerging competitive landscape in the country’s downstream oil and gas industry,” the statement said, even though Ardova Plc has been a significant off-taker from the refinery since its inception. Nigeria’s oil and gas sector is about to undergo a radical change as a result of the collaboration with Dangote Refinery. The deal is expected to mitigate the persistent problem of fuel scarcity that has long afflicted Nigeria by guaranteeing a steady and reasonably priced supply of gasoline products in the more than 1,000 retail locations of the two companies.
In tackling these issues, the Dangote Refinery, which started operations in 2024, has already been crucial. Its extensive operations have assisted in reducing the supply constraints that frequently result in price increases and fuel shortages. Nigerians had a comparatively easy time during the holiday season, with steady gasoline supply and no notable hikes in petrol prices.
The Dangote Refinery has made a substantial contribution to market stabilisation and price stability, in contrast to prior years when the nation experienced gasoline shortages and capricious price increases at peak seasons.
