As stated by the Dangote Petroleum Refinery, it has extended its free petroleum product delivery program to the states of Kano, Imo, Anambra, and Nasarawa. This move is anticipated to slash distribution costs for independent petroleum marketers and provide room for cheaper gas prices.
The initiative, which initially covered Lagos, Ogun, Rivers, Kaduna, Abuja, and Delta states, is intended to reduce the cost of transporting petroleum products over long distances from the refinery to various parts of the nation while bringing them closer to marketers and retailers, according to a statement released on Sunday.
The refinery is lowering one of the significant costs associated with the distribution chain for petroleum products downstream by covering 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 guaranty that the advantages of local refining translated into savings for companies and customers.
“In the end, the benefits of domestic refining must be felt outside the refinery gate. We are relieving a substantial portion of the distribution burden by covering the cost of shipping petroleum products to our clients, allowing the savings to pass through the value chain to customers. Our objectives are to increase fuel distribution efficiency, save unnecessary expenses, and promote more affordable pump pricing throughout 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.
If continued, this action will be able to lessen the hardships faced by independent marketers. He said, “There has been the problem of financial hold-up, where marketers pay for products but are not loaded for days or weeks, and they suffer needless hardship bringing the product down.”
He claims that the refinery’s distribution arrangement enhances cash flow, shortens the time that marketers’ funds are locked up, and enables companies to allocate their capital more effectively.
According to Dangote, the decrease in distribution costs is especially important for marketers who supply areas far from the refinery because long-distance petroleum product transportation entails additional costs for haulage, vehicle operations, driver costs, insurance, road hazards, and other logistics.
It was said that eliminating or cutting these expenses could make it more economical to supply far-off markets and provide marketers more leeway to compete on retail prices.
By bringing items closer to their ultimate markets, the project also lowers the operational hazards involved in transporting huge quantities of petroleum products over significant distances.
The growth occurs as Nigeria’s downstream petroleum industry continues to adapt to increasing local refining capacity and a more cutthroat market.
With a daily capacity of 700,000 barrels, the Dangote refinery has been supplying refined petroleum products to both domestic and foreign markets.
