Dangote Refinery Extends Free Fuel Delivery to Kano, Imo, Anambra, Nasarawa

 Dangote Refinery Extends Free Fuel Delivery to Kano, Imo, Anambra, Nasarawa

Refinery absorbs logistics costs as IPMAN says initiative could ease marketers’ burden and reduce petrol prices

Dangote Petroleum Refinery & Petrochemicals has expanded its free petroleum product delivery initiative to Kano, Imo, Anambra and Nasarawa states, a development expected to reduce distribution costs for independent petroleum marketers and create room for lower petrol prices across the affected markets.

The initiative, which initially covered Lagos, Ogun, Rivers, Kaduna, the Federal Capital Territory and Delta State, is aimed at bringing petroleum products closer to marketers and retailers while eliminating the cost of transporting products over long distances from the refinery.

By absorbing the delivery expenses, the refinery is taking on a major component of downstream distribution costs, potentially allowing marketers to operate more efficiently and pass some of the savings on to consumers.

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 extend beyond the refinery and 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.

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

The development has received the backing of the Independent Petroleum Marketers Association of Nigeria (IPMAN), which said the initiative would help ease some of the financial and logistical challenges faced by independent petroleum marketers.

National Publicity Secretary and Public Relations Officer of IPMAN, Chinedu Ukadike, said the arrangement addresses longstanding challenges in the distribution chain, particularly the delay between payment for petroleum products and their eventual loading and transportation.

According to him, marketers often commit substantial funds to product purchases but have to wait for days or weeks before their orders are loaded and delivered, leaving their capital tied down.

“This gesture, if sustained, will be able to alleviate the sufferings of independent marketers,” Ukadike said.

He added that the new delivery arrangement would reduce the period marketers' funds remain tied up, improve cash flow 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,” he said.

Ukadike also linked the initiative to the possibility of lower pump prices, noting that transportation costs form part of the expenses ultimately reflected in the price consumers pay for petroleum products.

“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 logistics expenses is particularly significant for marketers supplying products to locations far from the Dangote refinery in Lagos.

Under conventional distribution arrangements, long-distance transportation can involve substantial costs relating to haulage, vehicle operations, drivers, insurance, road risks and other logistics.

Eliminating or reducing those expenses could improve the economics of supplying distant markets while providing marketers with greater room to compete on retail prices.

The initiative is also expected to reduce some of the operational risks associated with transporting large volumes of petroleum products over long distances. Delivering products closer to their destination markets could shorten the supply chain and improve the efficiency and reliability of distribution.

Ukadike commended the management of Dangote Refinery for the initiative and called for its expansion to more parts of the country, particularly northern states where transportation distances can significantly increase distribution costs.

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 as Nigeria's downstream oil sector continues to adjust to increased domestic refining capacity and a more competitive market environment.

The Dangote Petroleum Refinery, with a stated capacity of 700,000 barrels per day, has emerged as a major supplier of refined petroleum products to the Nigerian market while also expanding its reach into international markets.

Beyond increasing domestic supply, the latest initiative represents an effort to address another major component of the downstream value chain—the cost of moving products from the refinery to retail markets.

For motorists and households, the potential benefit is clear: reducing transportation and distribution costs can give petroleum marketers greater scope to lower pump prices, particularly in markets located far from the refinery.