The Dangote Petroleum Refinery has expanded its free petroleum products delivery scheme to Kano, Imo, Anambra and Nasarawa states, saying the move will help independent petroleum marketers cut distribution expenses and potentially lower petrol prices.
The refinery announced the expansion in a statement on Sunday, explaining that the initiative was introduced to take petroleum products closer to marketers and retailers while eliminating the cost of transporting supplies from the refinery to distant parts of the country.
The programme was initially available in Lagos, Ogun, Rivers, Kaduna, Abuja and Delta states.
By taking responsibility for delivery costs, the refinery said it was removing a significant expense from the petroleum products distribution chain and allowing the savings to benefit businesses and consumers.
Group Executive Director, Commercial Operations, Oil & Gas, WAEP and Fertiliser, Dangote Industries Limited, Fatima Aliko Dangote, said the initiative was designed to ensure that the gains from 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. Our goal is to make fuel distribution more efficient, reduce avoidable costs and support more competitive pump prices across Nigeria.”
The Independent Petroleum Marketers Association of Nigeria welcomed the expansion, saying the arrangement could ease some of the financial and logistical challenges faced by independent marketers and contribute to cheaper petroleum products for consumers.
National Publicity Secretary and Public Relations Officer of IPMAN, Chinedu Ukadike, said the initiative addressed a persistent problem in the downstream sector, where marketers often commit significant funds to purchasing products and subsequently wait for days or weeks before their orders are loaded and transported.
“This gesture, if sustained, will be able to alleviate the sufferings of independent marketers. 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 stated.
Ukadike added that the delivery arrangement would shorten the period marketers’ money remained tied up, improve their cash flow and enable them to use their capital more effectively.
The refinery said the reduction in transportation costs would be particularly beneficial to marketers serving locations far from its facility, where long-distance haulage attracts additional expenses such as vehicle operations, drivers’ wages, insurance, road risks and other logistical costs.
According to the company, eliminating or reducing those expenses could make it more viable for marketers to supply distant markets while giving them greater flexibility to offer competitive prices at the pump.
The arrangement is also expected to reduce the risks associated with transporting large quantities of petroleum products across long distances by moving supplies closer to their final markets.
The expansion comes as Nigeria’s downstream petroleum industry continues to adjust to increased domestic refining capacity and growing competition.
The Dangote refinery has a refining capacity of 700,000 barrels per day and supplies refined petroleum products to the Nigerian market while also increasing its presence in international markets.