The Dangote Petroleum Refinery has expanded its free petroleum products delivery initiative to Kano, Imo, Anambra and Nasarawa states, saying the move will reduce distribution costs for independent petroleum marketers and create room for lower petrol prices.
The initiative, which initially covered Lagos, Ogun, Rivers, Kaduna, Abuja and Delta, is designed to bring 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 said it is removing a major expense from the downstream petroleum distribution chain. Fatima Aliko Dangote, Group Executive Director, Commercial Operations, Oil & Gas, WAEP and Fertiliser, said the initiative was intended to ensure that the benefits of domestic refining translate into savings for businesses and consumers.
According to her, absorbing delivery costs would reduce the distribution burden and allow savings to flow through the value chain. She said the goal was to make fuel distribution more efficient, reduce avoidable costs and support more competitive pump prices across Nigeria.
The Independent Petroleum Marketers Association of Nigeria welcomed the expansion, saying it would ease some of the financial and logistical pressures facing independent marketers. IPMAN spokesman, Chinedu Ukadike, said marketers often commit substantial funds to purchasing products and wait for days or weeks before their orders are loaded and transported.
Ukadike said the delivery arrangement would reduce the period marketers’ funds remain tied up, improve cash flow and allow businesses to deploy their capital more efficiently. Dangote also noted that the initiative would reduce haulage, vehicle, driver, insurance, road-risk and other logistics costs associated with transporting products over long distances.
The expansion comes as Nigeria’s downstream petroleum sector adjusts to increased domestic refining capacity and a more competitive market. The Dangote refinery, which has a 700,000-barrel-per-day capacity, has been supplying refined petroleum products to the domestic market while expanding its presence in international markets.
