Dangote Petroleum Refinery & Petrochemicals has expanded its free petroleum product delivery programme to Kano, Imo, Anambra and Nasarawa states.
The expansion raises the number of states covered by the scheme to 14 and is expected to lower distribution costs and improve petrol pricing across the country.
The initiative was first launched in Lagos, Ogun, Rivers, Kaduna, Abuja and Delta states.
It is designed to bring refined petroleum products closer to independent marketers and retailers while removing the cost of transporting fuel over long distances from the refinery.
By covering logistics costs, the refinery is taking away one of the biggest expenses in Nigeria’s downstream supply chain.
That could create room for marketers to reduce pump prices for motorists and households.
Dangote Explains The Plan
Group Executive Director, Commercial Operations, Oil & Gas, WAEP and Fertiliser, Fatima Aliko Dangote, said the plan is meant to ensure that domestic refining benefits reach 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,” she said.
She said the programme is meant to make fuel distribution more efficient, reduce avoidable costs and support more competitive pump prices nationwide.
What Marketers Say
The Independent Petroleum Marketers Association of Nigeria (IPMAN) praised the initiative, saying it could ease long-standing transport and cash-flow problems for its members.
IPMAN’s National Publicity Secretary and Public Relations Officer, Chinedu Ukadike, said many marketers usually pay for fuel and wait days or weeks before product gets transported to their locations.
He said the arrangement could help free up money tied down in the old distribution system.
“This gesture, if sustained, will be able to alleviate the sufferings of independent marketers,” he said.
He added that the policy could reduce risk, improve access to fuel and help bring pump prices down.
“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.
Fuel distribution in Nigeria often comes with heavy costs for haulage, insurance, truck maintenance, drivers and road risks.
Those costs eventually show up in the price paid by consumers at filling stations.
By delivering fuel closer to markets, Dangote Refinery is shortening the supply chain and reducing some of those extra expenses.
IPMAN has also asked the refinery to extend the scheme to more northern locations so more marketers can benefit.
I commend this, honestly I do, but will these people receiving the petroleum admit to it by reducing costs? You see the truth of the matter is, what is the guarantee of price reduction??
Nonetheless, kudos.