The Dangote Petroleum Refinery has expanded its free petroleum products delivery initiative to Kano, Imo, Anambra and Nasarawa states, in a move aimed at reducing distribution costs for independent petroleum marketers and creating room for lower petrol prices for consumers.
The latest expansion brings the initiative beyond its initial coverage of Lagos, Ogun, Rivers, Kaduna, Abuja and Delta states.
The expansion comes as Nigeria’s downstream petroleum sector continues to adjust to increased domestic refining capacity and growing competition.
According to the refinery, the programme is designed to bring petroleum products closer to marketers and retailers while eliminating the cost of transporting products over long distances from the refinery to different parts of Nigeria.
By absorbing delivery costs, the refinery said it is removing a major expense within the downstream petroleum distribution chain.
Aim to reduce fuel distribution costs
Group Executive Director, Commercial Operations, Oil & Gas, WAEP and Fertiliser at Dangote Industries Limited, Fatima Aliko Dangote, said the initiative was designed to ensure that the benefits of domestic refining extend beyond the refinery itself.
“The value of domestic refining must ultimately be felt beyond the refinery gate,” Mrs Fatima Aliko Dangote said.
She explained that absorbing delivery costs would remove a significant part of the distribution burden and create room for savings to move through the value chain to consumers.
“Our goal is to make fuel distribution more efficient, reduce avoidable costs and support more competitive pump prices across Nigeria,” she added.
IPMAN welcomes expansion
The Independent Petroleum Marketers Association of Nigeria welcomed the development, saying it could ease some of the financial and logistical challenges faced by independent marketers and contribute to lower prices for consumers.
National Publicity Secretary and Public Relations Officer of IPMAN, Chinedu Ukadike, said the initiative addressed a longstanding challenge in the petroleum distribution chain.
He explained that marketers often commit substantial funds to purchasing petroleum products but sometimes wait days or weeks before their orders are loaded and transported.
“This gesture, if sustained, will be able to alleviate the sufferings of independent marketers,” Mr Ukadike said.
How the initiative affects Nigerians
The refinery said eliminating long-distance transportation costs could particularly benefit marketers supplying areas far from Lagos, where additional expenses are incurred through haulage, vehicle operations, drivers, insurance, road risks and other logistics.
Reducing those expenses could give marketers greater flexibility to compete on retail prices, potentially creating room for cheaper petrol in affected markets.
The arrangement could also reduce the time marketers’ funds remain tied up while waiting for products to be loaded and transported, improving their cash flow and business operations.
The Dangote refinery has a stated capacity of 700,000 barrels per day and has been supplying refined petroleum products to the Nigerian market while also expanding its presence in international markets.
For Nigerians, the key question will be whether lower distribution costs ultimately translate into more affordable petrol prices at filling stations, particularly in states located farther from major fuel supply points.
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