The Dangote Petroleum Refinery has expanded its free petroleum products delivery initiative to Kano, Imo, Anambra and Nasarawa states, in a move aimed at reducing distribution costs for independent petroleum marketers and creating room for lower petrol prices across Nigeria.
The refinery disclosed this in a statement on Sunday, noting that the initiative was initially introduced in Lagos, Ogun, Rivers, Kaduna, Abuja and Delta states.
The programme is designed to bring petroleum products closer to marketers and retailers by eliminating the cost of transporting products over long distances from the refinery to different parts of the country.
By absorbing delivery expenses, the refinery said it is removing a major cost component in the downstream petroleum products distribution chain.
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 domestic refining translated into savings for businesses and consumers.
She said the value of domestic refining should extend beyond the refinery gate, adding that absorbing the cost of delivering petroleum products would remove a significant part of the distribution burden.
According to her, the initiative is expected to make fuel distribution more efficient, reduce avoidable costs and create room for more competitive pump prices across Nigeria.
The expansion was welcomed by the Independent Petroleum Marketers Association of Nigeria, which said the initiative would help reduce some of the financial and logistical pressures facing independent petroleum marketers.
National Publicity Secretary and Public Relations Officer of IPMAN, Chinedu Ukadike, said the initiative addressed a longstanding challenge in the petroleum products distribution chain.
He explained that marketers often commit substantial funds to purchasing petroleum products but may have to wait for days or weeks before their orders are loaded and transported, leaving their capital tied up.
According to Ukadike, sustaining the initiative would help alleviate the difficulties faced by independent marketers by reducing the financial and logistical burden associated with product distribution.
He added that the delivery arrangement could shorten the period during which marketers’ funds remain tied up, improve cash flow and allow businesses to deploy their capital more efficiently.
The refinery said the reduction in distribution costs would be particularly significant for marketers supplying locations far from its Lekki-based facility.
Transporting petroleum products across long distances typically involves additional expenses, including haulage, vehicle operations, driver costs, insurance, road risks and other logistics.
Removing or reducing these expenses could improve the economics of supplying distant markets and give marketers greater room to compete on retail prices.
The initiative could also reduce operational risks associated with transporting large volumes of petroleum products over long distances by moving products closer to their destination markets.
The expansion comes as Nigeria’s downstream petroleum sector continues to adjust to increased domestic refining capacity and a more competitive market environment.
The Dangote Petroleum Refinery has a production capacity of 700,000 barrels per day and has been supplying refined petroleum products to the Nigerian market while also expanding its presence in international markets.
The latest expansion is expected to further strengthen the refinery’s role in the domestic distribution of refined petroleum products and potentially ease some of the costs that contribute to petrol prices in distant markets.
