Dangote makes fresh move that could bring petrol prices down in four states

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Dangote Petroleum Refinery & Petrochemicals has extended its free petroleum product delivery programme to four additional states, namely Kano, Imo, Anambra and Nasarawa.

The refinery announced the expansion in a statement on Sunday, saying the initiative is expected to ease distribution expenses for independent petroleum marketers and potentially reduce petrol prices at filling stations.

The programme initially covered Lagos, Ogun, Rivers, Kaduna, Abuja and Delta, with the latest expansion aimed at bringing refined petroleum products closer to marketers and retailers in more parts of the country.

By covering the cost of transporting products from the refinery to the designated locations, Dangote Refinery is removing a major expense associated with downstream petroleum distribution.

Group Executive Director, Commercial Operations, Oil & Gas, WAEP and Fertiliser, Fatima Aliko Dangote, said the initiative was introduced to ensure that the advantages of local refining translate into measurable savings for businesses and consumers.

“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. Our goal is to make fuel distribution more efficient, reduce avoidable costs and support more competitive pump prices across Nigeria.”

The expansion has received support from the Independent Petroleum Marketers Association of Nigeria, IPMAN, which said the arrangement would help ease some of the financial and logistical difficulties faced by independent marketers.

National Publicity Secretary and Public Relations Officer of IPMAN, Chinedu Ukadike, said the initiative addresses a longstanding problem in the distribution chain, where marketers often commit substantial funds to purchasing products and subsequently experience delays before their orders are loaded and transported.

“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.”

He explained that the new delivery arrangement would reduce the length of time marketers’ money remains tied up, improve their cash flow and enable them to use 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,” he said.

Ukadike further noted that the initiative could translate into lower pump prices because transportation costs form part of the expenses ultimately passed on to consumers.

“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 reduction in transportation expenses is expected to be particularly beneficial to marketers operating in areas located far from the refinery.

Under the conventional distribution system, transporting petroleum products across long distances involves expenses such as haulage, vehicle operations, drivers’ costs, insurance, road-related risks and other logistical charges.

Removing some of these expenses could improve the profitability of supplying distant markets while creating more room for marketers to offer products at competitive prices.

The programme could also reduce some of the operational risks associated with transporting large quantities of petroleum products across lengthy routes.

By moving products closer to their destination markets, the refinery is helping to shorten the distribution chain and potentially improve the reliability and efficiency of supplies.

Ukadike commended Dangote Refinery for introducing the initiative and appealed to the company to expand the programme to additional locations nationwide, particularly across the northern states.

He said wider coverage would improve access to competitively priced petroleum products and provide greater relief to independent marketers.

The IPMAN spokesman described the development as an example of how competition and deregulation could produce benefits within Nigeria’s downstream petroleum sector.

“This is the beauty of deregulation and competition,” he said.

The latest expansion comes as Nigeria’s downstream petroleum industry continues to adapt to increased domestic refining capacity and a more competitive market.

Dangote Petroleum Refinery, which has a stated capacity of 700,000 barrels per day, has increasingly supplied refined petroleum products to the Nigerian market while also expanding its activities in international markets.

The free delivery programme represents another step in the refinery’s growing influence on the downstream sector.

Beyond increasing the availability of locally refined products, the initiative seeks to lower the cost of transporting those products from the refinery to different markets.

For motorists and households, the potential benefit is clear: reducing transportation expenses across the supply chain could give marketers greater room to lower the prices paid by consumers at the pump.

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