Dangote Refinery Expands Free Fuel Delivery to Kano, Imo, Anambra, Nasa
rawa, Nearly 10 Other States
…IPMAN hails initiative, says move will cut logistics costs, improve marketers’ cash flow and create room for lower pump prices
Dangote Petroleum Refinery & Petrochemicals has expanded its free petroleum products delivery initiative to Kano, Imo, Anambra and Nasarawa States, with nearly 10 additional states expected to benefit from the programme.
The initiative, which initially covered Lagos, Ogun, Rivers, Kaduna, Abuja and Delta States, is designed to reduce the cost of transporting petroleum products from the refinery to marketers across the country.
By absorbing delivery and logistics expenses, the refinery is seeking to remove a major cost component from the downstream supply chain, potentially giving marketers greater room to offer petrol at more competitive prices.
Group Executive Director, Commercial Operations, Oil & Gas, WAEP and Fertiliser, Fatima Aliko Dangote, said the initiative was aimed at ensuring that the benefits of domestic refining translate into tangible savings for businesses and consumers.
She said: “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.”
According to her, the objective is to make fuel distribution more efficient, eliminate avoidable costs and support more competitive pump prices across Nigeria.
The development has received strong commendation from the Independent Petroleum Marketers Association of Nigeria (IPMAN), which said the initiative would ease some of the financial and logistical challenges confronting independent petroleum marketers.
National Publicity Secretary and Public Relations Officer of IPMAN, Chinedu Ukadike, described the initiative as a significant intervention in the petroleum distribution chain.
He explained that marketers often commit substantial funds to purchasing petroleum products, only to experience delays in loading and transporting their orders, leaving their capital tied down for days or weeks.
“This gesture, if sustained, will be able to alleviate the sufferings of independent marketers,” Ukadike said.
He added that Dangote Refinery’s delivery arrangement would help marketers improve their cash flow and deploy their funds 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 also linked the reduction in transportation costs to the possibility of lower pump prices for consumers, noting that logistics expenses are ultimately reflected in the price of petroleum products.
He said the closer products are delivered to their destination markets, the lower the financial and operational burden on marketers.
“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,” he said.
The initiative is particularly significant for marketers operating in states located far from the refinery, where long-distance transportation can add considerably to the cost of petrol distribution through haulage, vehicle operations, driver expenses, insurance and road-related risks.
Removing or reducing those expenses could improve the economics of supplying distant markets and create greater opportunities for competitive pricing.
The free delivery arrangement could also help reduce operational risks associated with transporting large volumes of petroleum products across long distances by bringing products closer to their intended markets.
Ukadike commended the management of Dangote Refinery and called for the expansion of the initiative to more locations, particularly across the northern part of the country.
He described the development as a practical demonstration of the benefits of competition and deregulation in Nigeria’s downstream petroleum sector.
“This is the beauty of deregulation and competition,” he said.
The expansion comes amid continuing changes in Nigeria’s downstream petroleum industry, driven by increased domestic refining capacity and a more competitive market environment.
With a refining capacity of 700,000 barrels per day, Dangote Petroleum Refinery has continued to strengthen its role in supplying refined petroleum products to the Nigerian market while expanding its presence in international markets.
Beyond increasing the availability of locally refined products, the free delivery initiative introduces another dimension to the refinery’s impact on the downstream sector by seeking to reduce the cost of moving products from the refinery to different parts of the country.
For motorists, households and businesses, the potential benefit is significant: reducing the cost of transporting petrol through the supply chain could give marketers greater flexibility to offer more competitive pump prices and ultimately ease the burden on consumers.