The Dangote Petroleum Refinery has expanded its free petroleum products delivery scheme to Kano, Imo, Anambra and Nasarawa states in a move aimed at cutting distribution costs and creating room for lower petrol prices.
The refinery disclosed this in a statement on Sunday, noting that the initiative, which previously covered Lagos, Ogun, Rivers, Kaduna, Abuja and Delta, was designed to take products closer to marketers and retailers.
Under the arrangement, the refinery bears the cost of transporting petroleum products to the affected locations, reducing the expenses incurred by independent petroleum marketers in moving products over long distances.
Group Executive Director, Commercial Operations, Oil & Gas, WAEP and Fertiliser, Dangote Industries Limited, Fatima Aliko Dangote, said the initiative was intended to ensure that the benefits of local refining reached 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 was welcomed by the Independent Petroleum Marketers Association of Nigeria, which said the scheme would ease some of the financial and logistical challenges confronting its members.
IPMAN’s National Publicity Secretary and Public Relations Officer, Chinedu Ukadike, said the arrangement would address the prolonged delays marketers sometimes face after paying for petroleum products.
“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 help reduce the period marketers’ funds remained tied up, improve cash flow and enable them to deploy their capital more efficiently.
The refinery said the initiative would particularly benefit marketers supplying distant markets, where haulage, vehicle maintenance, driver expenses, insurance and road risks add significantly to the cost of distributing petroleum products.
It added that reducing those expenses could improve the economics of supplying remote locations and give marketers greater flexibility to compete on pump prices, while also reducing the risks associated with transporting large volumes of petroleum products over long distances.
The expansion comes amid continuing changes in Nigeria’s downstream petroleum sector following increased domestic refining capacity and growing competition in the market.
The Dangote refinery has a stated capacity of 700,000 barrels per day and supplies refined petroleum products to the Nigerian market while also serving international markets.
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