Dangote Refinery Extends Free Fuel Delivery to Four More States

The Dangote Petroleum Refinery has expanded its free petroleum products delivery initiative to Kano, Imo, Anambra and Nasarawa states as part of efforts to reduce distribution costs and potentially drive down petrol prices across Nigeria.

The initiative, which previously covered Lagos, Ogun, Rivers, Kaduna, Abuja and Delta, is designed to bring refined petroleum products closer to independent petroleum marketers and retailers while eliminating the cost of transporting products over long distances from the refinery.

By absorbing delivery costs, Dangote Refinery is targeting one of the major expenses in Nigeria’s downstream petroleum distribution chain.

Fatima Aliko Dangote, Group Executive Director, Commercial Operations, Oil & Gas, WAEP and Fertiliser at Dangote Industries Limited, said the initiative was intended to ensure that the benefits of domestic refining extend beyond the refinery to 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 added that the company’s objective was to make fuel distribution more efficient, eliminate avoidable costs and support more competitive pump prices.

Marketers welcome expansion

The Independent Petroleum Marketers Association of Nigeria welcomed the expansion, saying the arrangement could ease some of the financial and logistical challenges facing independent marketers.

Chinedu Ukadike, National Publicity Secretary and Public Relations Officer of IPMAN, said the initiative addressed a long-standing challenge in the distribution of petroleum products.

According to him, marketers often commit significant funds to purchasing products but may wait for days or weeks before their orders are loaded and transported to their destinations.

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

Ukadike said the arrangement could reduce the period marketers’ funds remain tied up, improve cash flow and allow businesses to deploy their capital more efficiently.

Lower logistics costs could support cheaper petrol

The expansion is particularly significant for marketers supplying locations far from the Dangote refinery in Lagos.

Transporting petroleum products across long distances involves several costs, including haulage, vehicle operations, driver expenses, insurance and road-related risks.

By taking products closer to destination markets and absorbing delivery costs, the refinery is effectively reducing part of the logistics burden carried by marketers.

If the savings are passed through the supply chain, the arrangement could give retailers greater room to compete on pump prices.

The initiative could also reduce the operational risks associated with moving large volumes of petroleum products over long distances.

The Dangote refinery has a nameplate capacity of 700,000 barrels per day and has increasingly supplied refined petroleum products to the Nigerian market while also expanding into international markets.