The initiative is aimed at cutting logistics costs for independent marketers and creating more room for cheaper petrol at filling stations…..
Dangote Petroleum Refinery & Petrochemicals has expanded its free petroleum product delivery programme to Kano, Imo, Anambra and Nasarawa states, in a move that could reduce distribution costs for independent petroleum marketers and put downward pressure on petrol prices.
The refinery announced the expansion in a statement on Sunday, saying the initiative is designed to bring petroleum products closer to marketers and retailers while eliminating a major cost associated with transporting products across long distances.
The programme initially covered Lagos, Ogun, Rivers, Kaduna, Abuja and Delta.
Under the arrangement, Dangote Refinery absorbs the cost of delivering petroleum products to designated locations, potentially reducing the amount marketers spend on haulage and other logistics before products reach filling stations.
Fatima Aliko Dangote, Group Executive Director, Commercial Operations, Oil & Gas, WAEP and Fertiliser, said the initiative was introduced to ensure that the benefits of domestic refining extend beyond the refinery itself.
She said the objective was to reduce avoidable distribution expenses and allow savings generated within the supply chain to benefit both businesses and consumers.
“The value of domestic refining must ultimately be felt beyond the refinery gate,” she said.
According to her, absorbing delivery costs removes a significant part of the distribution burden and creates greater room for more competitive pump prices.
“Our goal is to make fuel distribution more efficient, reduce avoidable costs and support more competitive pump prices across Nigeria,” she added.
The Independent Petroleum Marketers Association of Nigeria (IPMAN) welcomed the expansion, describing it as a potential relief for independent marketers facing high operating and logistics costs.
Chinedu Ukadike, National Publicity Secretary and Public Relations Officer of IPMAN, said the arrangement could ease one of the longstanding challenges in the downstream sector: having marketers’ funds tied up while they wait for petroleum products to be loaded and transported.
According to Ukadike, marketers can sometimes pay for products and wait days or even weeks before they are loaded, creating additional financial pressure on their businesses.
He said Dangote’s delivery arrangement could reduce such delays and allow marketers to put their working capital to more productive use.
“This gesture, if sustained, will be able to alleviate the sufferings of independent marketers,” Ukadike said.
He added that the arrangement gives marketers easier access to products while reducing the amount of capital locked into the distribution process.
Could petrol prices fall further?
Transportation is one of the costs built into the downstream petroleum supply chain.
When products have to travel long distances from a refinery to their final markets, marketers incur expenses linked to haulage, vehicle operations, drivers, insurance, road risks and other logistics.
By taking on delivery costs, Dangote Refinery is effectively removing part of that burden for participating marketers.
IPMAN believes the savings could eventually translate into lower prices for motorists.
Ukadike said marketers would have less incentive to pass transportation costs on to consumers when products are delivered closer to their businesses.
He also argued that increased competition could encourage marketers to reflect lower acquisition and distribution costs in their pump prices.
“The more Dangote brings down its pump price, the more independent marketers will bring down theirs,” he said.
Northern states could see more benefits
The expansion to Kano and Nasarawa is particularly significant for markets located farther from the refinery in Lagos, where transportation can add considerably to the cost of petroleum products.
Extending the programme to more states could shorten parts of the distribution chain and reduce the operational risks associated with moving large volumes of fuel across long distances.
IPMAN has urged Dangote Refinery to expand the initiative to additional locations, particularly across more northern states.
According to the association, wider coverage would make competitively priced petroleum products accessible to more marketers and consumers.
Dangote refinery reshapes downstream market
The latest move comes as Nigeria’s downstream petroleum industry continues to adjust to the growing role of domestic refining.
Dangote Petroleum Refinery, with a stated capacity of 700,000 barrels per day, has become an increasingly important source of refined petroleum products for the Nigerian market while also pursuing opportunities in international markets.
Its impact on the downstream sector is therefore extending beyond the production of petrol and other refined products.
By absorbing distribution costs in selected markets, the refinery is now seeking to influence another major component of the fuel pricing chain: logistics.
For consumers, the potential benefit is clear. If lower transportation and distribution costs are sustained and passed through by marketers, motorists could see greater competition and potentially cheaper petrol at the pump.
The expansion will therefore be closely watched across the downstream market, particularly as marketers assess whether the lower logistics burden translates into meaningful savings for businesses and consumers.
