The Dangote Petroleum Refinery announced it has extended its free petroleum product delivery to Kano, Imo, Anambra, and Nasarawa states.
This move is expected to slash distribution costs for independent petroleum marketers and provide room for cheaper petrol.
The initiative, which initially covered Lagos, Ogun, Rivers, Kaduna, Abuja, and Delta states, is intended to bring petroleum products closer to marketers and retailers while removing the expense of shipping goods over long distances from the refinery to various parts of the nation, a statement said on Sunday.
One of the main costs associated with the downstream petroleum product distribution chain is being reduced by the refinery by absorbing delivery fees.
Fatima Aliko Dangote, Group Executive Director, Commercial Operations, Oil & Gas, WAEP, and Fertilizer, Dangote Industries Limited, stated that the initiative’s goal was to guarantee that the advantages of local refining translated into savings for companies and customers.
“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 Independent Petroleum Marketers Association of Nigeria reportedly applauded the development, claiming it will lessen some of the logistical and financial strains independent petroleum marketers face and help lower consumer costs.
According to Chinedu Ukadike, IPMAN’s National Publicity Secretary and Public Relations Officer, the initiative tackled a persistent issue in the petroleum products distribution chain, where marketers spend large sums of money on product purchases and may then have to wait a long time for their orders to be loaded and shipped.
“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.
According to him, the refinery’s delivery arrangement shortens the time that marketers’ funds are held up, increases cash flow, and enables enterprises to utilize their capital more effectively.
Dangote stated that the reduction in distribution costs is especially significant for marketers supplying areas far from the refinery, as transporting petroleum products over long distances incurs additional costs associated with haulage, vehicle operations, driver costs, insurance, road risks, and other logistics.
It was claimed that eliminating or lowering such costs would improve the economics of supplying distant markets and give marketers more room to compete on retail prices.
The program also lowers the operational hazards involved with transporting large volumes of petroleum products across great distances by bringing items closer to their final markets.
The expansion occurs as Nigeria’s downstream petroleum sector adapts to greater domestic refining capacity and a more competitive market environment.
The Dangote refinery, which has a capacity of 700,000 barrels per day, supplies refined petroleum products to the domestic market while simultaneously extending its position in foreign markets.
