Dangote Petroleum Refinery and Petrochemicals has extended its free petroleum product delivery initiative to Kano, Imo, Anambra and Nasarawa states in a move aimed at reducing distribution costs and creating room for lower petrol prices.
The expansion brings the programme to 10 locations, following the commencement of deliveries to Lagos, Ogun, Rivers, Kaduna, Abuja and Delta.
Under the initiative, Dangote Refinery bears the cost of transporting petroleum products to customers, removing a major expense from the downstream distribution chain.
The refinery said the arrangement would reduce costs associated with long-distance haulage, including vehicle operations, drivers’ expenses, insurance and transportation risks, particularly for marketers operating far from the refinery.
Group Executive Director, Commercial Operations, Oil & Gas, WAEP and Fertiliser, Fatima Aliko Dangote, said the initiative was designed to ensure that the benefits of domestic refining extended beyond the refinery itself.
“The value of domestic refining must ultimately be felt beyond the refinery gate. By absorbing the cost of delivering petroleum products to our customers, we are removing a significant component of the distribution burden and creating room for those savings to flow through the value chain to consumers,” she said.
Dangote said the initiative would also improve the efficiency of petroleum product distribution while reducing avoidable costs.
“Our goal is to make fuel distribution more efficient, reduce avoidable costs and support more competitive pump prices across Nigeria,” she added.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) welcomed the expansion, saying it could ease some of the financial and logistical challenges faced by independent marketers.
IPMAN National Publicity Secretary and Public Relations Officer, Chinedu Ukadike, said the initiative could address the delays experienced by marketers who commit substantial funds to purchasing petroleum products but often wait days or weeks before loading and transporting them.
“This gesture, if sustained, will be able to alleviate the sufferings of independent marketers,” Ukadike said.
“There has been the issue of financial hold-up, whereby marketers pay for products and are not loaded for days and weeks, and they suffer unnecessary hardship bringing the product down.”
According to him, delivering products closer to marketers would reduce the period their funds remain tied up and enable them to deploy their capital more efficiently.
“This time around, Dangote has made it very, very easy for marketers. Marketers are jubilating, and you will see the return on investment as an independent marketer. Your money will not be tied down,” Ukadike said.
He also said lower logistics costs could translate into reduced pump prices, as transportation expenses are ultimately reflected in the price paid by motorists.
“You also have less risk, and you have petroleum products at your doorstep. Other consumers will also see that our pump price will not continue to go up. The more Dangote brings down its pump price, the more independent marketers will bring down theirs,” he said.
The impact of the initiative could be more pronounced in states located far from the refinery, where transporting petroleum products over long distances adds significantly to marketers’ operating costs.
The programme could also reduce some of the risks associated with the long-distance transportation of large volumes of petroleum products by bringing supplies closer to their destination markets.
Ukadike urged Dangote Refinery to extend the initiative to more locations, particularly across northern Nigeria, to enable additional independent marketers to benefit from lower distribution costs.
“This is the beauty of deregulation and competition,” he said.
The initiative comes as Nigeria’s downstream petroleum sector continues to adjust to increased domestic refining capacity and greater competition following years of dependence on imported refined products.
Dangote Petroleum Refinery, with a processing capacity of 700,000 barrels per day, has continued to increase supplies to the domestic market while expanding exports of refined petroleum products.
For consumers, however, the key measure of the programme’s success will be whether the savings achieved through free delivery are ultimately reflected in lower pump prices.
