— Distribution burden removed for savings to reach consumers. — Dangote
–IPMAN applauds initiative
Free delivery of fuel to filling stations is expected to reduce distribution costs for independent petroleum marketers and create room for lower petrol prices.
This objective explains why Dangote Petroleum Refinery and Petrochemicals has expanded its free petroleum product delivery initiative to Kano, Imo, Anambra and Nasarawa States.
The initiative, which initially covered Lagos, Ogun, Rivers, Kaduna, Abuja and Delta, is designed to take petroleum products closer to marketers and retailers while eliminating the cost of transporting products over long distances from the refinery.
By absorbing delivery costs, the refinery is removing a significant expense from the downstream distribution chain and giving marketers more room to operate at competitive prices.
Group Executive Director, Commercial Operations, Oil & Gas, WAEP and Fertiliser, Fatima Aliko Dangote, said the initiative was intended to ensure that the benefits of domestic refining translate into savings for businesses and consumers. In her words:
“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 initiative has been welcomed by the Independent Petroleum Marketers Association of Nigeria (IPMAN), which said it would ease some of the financial and logistical pressures facing independent marketers.
National Publicity Secretary and Public Relations Officer of IPMAN, Chinedu Ukadike, said the initiative addresses a longstanding challenge in the petroleum products distribution chain, where marketers commit substantial funds to product purchases and may wait for days or weeks before their orders are loaded and transported. Ukadike said:
“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.”
According to him, Dangote’s delivery arrangement would reduce the period marketers’ funds remain tied up, improve cash flow and allow 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 said the initiative could also help moderate pump prices because transportation costs are ultimately reflected in the price consumers pay.
“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.”
The impact is expected to be particularly significant in markets located far from the refinery, where marketers traditionally incur substantial haulage, vehicle operating, insurance and other logistics costs.
Removing those expenses could improve the economics of supplying distant markets while reducing the risks associated with transporting large volumes of petroleum products over long distances.
Ukadike commended Dangote Refinery for the initiative and urged the company to extend the programme to more locations, particularly in the northern states.
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 petroleum market adjusts to rising domestic refining capacity and increased competition among suppliers.
The Dangote Petroleum Refinery, with a capacity of 700,000 barrels per day, has continued to supply refined petroleum products to the domestic market while expanding its presence in international markets.
The free delivery initiative adds a new dimension to the refinery’s role in the downstream sector by targeting not only product availability but also the cost of moving products from the refinery to end markets.
For consumers, the potential benefit is straightforward: lower distribution costs could give marketers greater room to reduce pump prices and improve the competitiveness of petroleum products across the country.
